Many people do not realize the idea they have conceived may not necessarily make a successful business. People also have been taking for granted that once an idea is conceived, the creation of the business is going to work automatically.
To be able to spot a winning company at its early stages depends on the ability to spot the person or team of people who can effectively transform an idea into a business.
In my personal experience, this part of converting the idea into a business strategy and a workable business model has been among the toughest experiences I’ve had. There are so many things to consider, spanning all the aspects of doing a business, such as the people to be hired, the marketing plans, the competitive analysis, the risk factors, the financial plan, the market survey etc… – Mr Inderjit Singh, The Art and Science of Entrepreneurship.
An idea is worth nothing if not executed properly. In order to turn an idea into a proper business, there are a couple of things to consider.
1. Feasibility(Is there a real opportunity) –
We need to see if the idea is feasible and can it be achieved so that we the business makes a profit to keep going.How to make it work? What resources are required? Will it bring in revenues? Is it what our customers want?
2. Target Audience –
An idea may seem great to you, but it may not appeal to everyone. We have to identify, who will be keen to buy your product. From here we have to figure out how to get them to buy.
3. Resources –
We need to identify the resources needed, where and where they will come from, this will include.
Human Resources: Staff, Business Partners, External Business Partners
Property: Office Space, Warehouse, Factory
Equipment: Storage, Machinery
Finance: Own funding, customer financing(cash flow), loans from friends and family, bank loans or VC funding.
4. Vision and Mission –
Where do you see the idea and the company going? How big do you want to grow the company? Do you plan to take over the world in 5 years? Or maybe just one country in 10 years?Knowing where you want to be will help tremendously. It will give you guidance and understanding of how you would build the business. You may not want to aim to be the next Microsoft; instead you may just want to be a neighborhood store. By defining this, you will be able to make your plans better.
5. Strategies –
The main aim for a business is to make money, to get its product out into the market and to get people buying. This will help the company to be more sustainable and to be alive for the long term.
Strategies to work on:
Business Strategy: How do we build and grow the business?
Revenue Models: How do we make money?
Marketing Strategy: How do we get the word out into the market? How do we keep customers on board for the long term?
Operational Strategy: How do we run our day-to-day operations as efficiently as possible? How do we keep costs low and productivity high?
In the process of transformation, lots of questions need to be asked. Ask friends and family to chip in and pitch questions. Feedback from people who are not involved, but are potential customers will really give a different perspective on things, and they may even touch on things that you have overlooked. Clearing as many doubts as you can in this phase will help you build a better plan.
For EntreCity, we actually stepped outwards and took a look back in as customers. While writing up the plans, we sat down as customers and scrutinized each and every product.
Would we as customers use (and pay for) any of the products offered? This helped us to streamline our products, in order to make it better.
Thinking is not enough; an idea in the head is worth nothing, if not implemented.
In part 2 of this lesson, we look deeper into planning for the implementation phase.