How to start a new business – what to do next when you think you have a great idea.

So you have an idea, but you don’t know where to start.

First up. Where not to start.

I wonder why it seems to be in our DNA to want to come up with a business name and get a logo for our idea, before we even have a clear picture of what our customer and idea looks like.

I’ve made the mistake before myself. You have a vague idea of what you want to do, you have all the energy and excitement in the world and it seems natural that the first thing you do is come up with a clever name that will attract hoards of people to you.

You mash together the first syllable of your name with the last two syllables of the product or service idea and… Voila… you’re a genius – there you have it.

Avoid the temptation. I know, its the sexy, romantic part of the process and a heck of a lot more exciting and comfortable that ‘research’, but just don’t do it.

Having a name and logo doesn’t mean you have a business. Having a genuine market and people prepared to put money down to acquire your product or service means you have a business.

Start with research. Period.

What do you research?

  • Who is you target market? I mean, really get nitty-gritty with this. 
    • Where do they live?
    • Do they have kids? How many? What ages?
    • Income level?
    • Single, married, other?
    • Hobbies and interests?
    • Are they time poor?
    • Where do they live online?
    • Do they engage on Facebook, Instagram etc?
    • How do they get to work?
    • The questions will vary for your audience, but ask a lot. You can never know your target audience too well.
  • What is you target market looking for when they think of your product. 
    • Type the terms you think they’d use into Google. See who else comes up.
    • Scroll to the bottom of the page and look at ‘related searches’. This’ll give you a great idea of the type of questions your customer is looking for answers on (the problems they’re looking for your product to solve).
    • Get more technical. Use Google Keyword Planner tool to see how many monthly searches are conducted on those key phrases in your local area. See what other terms Google suggests are used by your target customer.
    • All of this research is going to help you decide later, what to call yourself, what key messages you need to do, to rank in Google’s search results and attract your target.
  • How big is the market?
    • Have you ever watch Shark Tank? The show where budding entrepreneurs pitch business ideas to investors? The investors are always most interested in firm numbers. Evidence a viable business can or does exist in the same. Two of those core metrics are;
      • Size of the potential market
      • Potential market share one could acquire
  • Is there anyone already providing the product or services in the space already?
    • If there is, don’t be scared off by that. It’s validation the idea has a market, and there’s no reason you can’t enter the same market and put your personality or spin on it – as long as, you’re confident you can do it better than they are.
  • What are the best ranking competitors doing?
    • How do they present themselves online?
    • What does their brand look like. The style, the colours, the tone, the language. How do they position themselves?
    • What are their key products and services, and how
  • When you’ve done this, have a a think about what your unique selling proposition is.
    • What will differentiate you from the market and why would people choose you?
    • Start as niche as possible. If you’re thinking about getting into Event Management, what types of events can you start in? The more you can niche down (where a sizeable enough target market exists), the better.  Rather than ‘Event Management’, if you can drill down to ‘Themed Toddler Parties Brought to You’, you’re going to have a much better chance at attracting your target customer than more general terms.
  • Know your why.
    • Why do you want this?
    • How hard are you prepared to work? Or not work.
    • Have you spoken to your partner about it? Are they on board? Do they understand the commitment you’ll need to put it? Do they get that in the early days you’ll be making $15 bucks an hour slogging it out while trying to build momentum.
  • Do some numbers. 
    • Based on your research, where is your price point?
    • What’s the profitability based on that price point?
    • How many hours per week would you need to do to achieve the sales you think you’d need? Now double that figure, and you’re probably closer to what you truly need to do.
    • What are the set up costs? What else is involved. Do you need outside expertise to help you get going?
    • Whats the period of time until you break even based on the numbers above? Can you tolerate that?
    • My point here is, know your numbers. Be all over them. And start now – you can never plan your cashflow and budgets too much, particaularly not in the start up phase.

Take some time to think. 

Just take some time to process what you’ve learnt during the research phase. Talk to friends and families. Give your subconscious – your gut brain – time to digest everything. Your best ideas and moments of utmost clarity, will come to you when you least expect it.

If after taking some time to process what you’ve learnt during the research phase you’re still super keen to run ahead with your idea – fantastic, you’re ready for the next stage. Starting to plan the execution.

But that’s a whole other post.

 

Image Courtesy: Flickr user sapphir3blu3 under licence CC BY-SA 2.0

 

 

 

 

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