In many ways coming up with an idea is the easy part (although it might not seem like it at the time). It’s shiny, it’s new, the world feels bursting with possibilities. But the path from idea to successful business is long, it’s hard and it’s not for the faint-hearted.
Do you need everything figured out? Definitely not. But you do need to have the fundamentals right.
“So often people are working hard at the wrong thing. Working on the right thing is probably more important than working hard.” ― Caterina Fake
Growing a business takes a lot of effort, you don’t want to get years down the track before you realise there is a core issue you can’t resolve. About 30% of businesses fail in the first two years in business, with 50% making it to 5 years. You want to make sure you are sitting on the right side of those statistics.
So let’s explore the questions you should be asking yourself before you take the leap from idea to action.
What problem am I solving?
Of all the questions this has to be the most important. If you aren’t solving a problem, you don’t have a market. You want to launch a business with an idea that solves a problem for your customers, something that makes their lives better – whether in small or big ways – because you are a part of it.
Think about meal kit businesses like Hello Fresh or Marley Spoon. All the ingredients arrive on your doorstep in perfectly measured amounts, along with the recipe. You get the pleasure of cooking, without any of the stress of planning, deciding, or shopping. Is the problem they are solving that you need to eat? No. You could order ready made meals, or takeaway. The problem they are solving is that you are time poor, but still like the idea of cooking. You want a fuss free experience, but one that doesn’t forgo cooking altogether.
What’s my why?
You need to spend some time really reflecting on this question. You might have a cracker of an idea, but if you don’t have the purposeful passion for it, you won’t last the distance. Your work needs to really matter to you to take you through the challenges that come with entrepreneurship. The best place to start is with Simon Sinek’s Ted Talk The Golden Circle, he also has a fantastic book Start with Why and many other resources.
What does MVP look like?
A minimum viable product (MVP) is the simplest version you can take to market that can satisfy early customers. Releasing early, and getting feedback that you can incorporate into later releases is a really powerful way to grow a customer-centric business. It also means you are testing the market before you get too far down the track, and have invested too much, into something that may not be quite right. The more agile you can be, the more you can test, the more you can iterate the greater chances you have of success.
Do the numbers stack up?
You need to make sure your business model stacks up. More often than not you will come up with an idea that seems to be a go-er, and then you get to this step and do the maths and realise the margin isn’t right. The ratios just don’t stack up when you look at the effort required, versus the revenue you will generate. Do new opportunities come as you progress within a business? Absolutely. But if you start off with a flawed model you are setting off on a path you already know is lined with challenge. And then there are all the challenges you won’t have thought of. Get creative, explore your idea from all angles, but if it isn’t a cash generator then it should be a hobby not a business.
Do I have the time, energy and resources?
Never underestimate how much more is required than what you anticipate. Do you have enough time? Are you starting as a side hustle and keeping your job? Map out exactly what you need in terms of time, in terms of cash and in terms of help to get your business to the point where it is cash-positive and able to fund what you need to scale it. Have a serious think about if you actually do want to scale it. Perhaps it’s a one person lifestyle business, or maybe you plan on being the next tech unicorn. Either way it doesn’t matter, just as long as you have thought it all through.
Who do I need on my team for this to be successful?
Time for some self-analysis. In order to know who you need on your team you need a really good sense of your strengths, and your weaknesses. Are you able to take this business to where it needs to on your own? Can you afford to employ the people you need? Or maybe you need to consider a co-founder? If you do want a co-founder – or employee for that matter – you need a deep understanding of what you want their role to be. What gaps it might be that you are filling. Mapping this out before you get carried away in discussions is crucial to make sure they are actually solving what you need. It helps you be very clear with each other on expectations from the get go.
How will this be unique?
And finally, how is this business going to be unique? Do you have to have invented some crazy-genius-never-been-seen-before thingamybob. No. But there needs to be some special sauce that makes you stand out. Something that makes your customers want to engage with you over someone else – and then tell their friends about you. You can explore this in detail in our article In business it’s standout or die – here’s how. If you are just playing a game of ‘me too’ you are going to have to work very hard (and spend a lot on marketing), whereas if you are building a rockstar brand it’s a totally different story.
Jodie + Em xx
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