The business idea stage is often the most exciting time for any entrepreneur because the possibilities can be endless. After a lot of thought, you have settled on one idea that you think will be a fantastic business idea. The question is, is your business idea ready to get funded? I am going to share with you my thoughts on whether a business idea is ready to get funded yet.
Know What Is in Store for You
Most rookies to the entrepreneur game see market research as a bore, they often think it takes forever and is not needed. But in reality, the most time-consuming part of this process is building your business on assumptions that do not pan out in real life. It is such a shock to the system for these first-time entrepreneurs that they lose steam. So, learn from their mistakes, if you have a business idea, you need to understand that market research is critical to your business’s success. Ask yourself these questions before committing to any idea:
- Does this solve a pain point for a profitable demographic? How much would they be willing to pay to solve this issue?
- Who wants the product? Why would they want it and is there enough market share for you to cut yourself a sizable slice of pie?
- Who are your competitors in your market? And how can you do better?
- What can you learn from your competitors about the day to day management of this kind of business? Cost of marketing, production, delivery, pricing etc?
- How much space is left for you next to your competitors in your chosen market?
- Are alternatives providing a better value to cost ratio?
There are many more questions you will need to consider when you are starting a business. If you want to understand even more on this topic talk to the experts in your industry or who are in similar industries to give you some perspective on this because they answers can dramatically change based on what your industry does.
Figure out How you are going to do it
Being able to answer the questions above will reveal that your idea probably already exists. There is nothing wrong with that. You can still use your idea you just need to put your own spin on it. The standout elements of your business will not be your ideas but instead how you execute those ideas. Apple is a famous example of this. They were not first to market with most of their most famous ideas. But they put their own spin on those ideas, and they are one of the biggest companies in the world.
You could compare building a business to building a home. All homes have similar elements like a bedroom, kitchen, living room, etc. What makes them unique is how these elements are located. The design elements that you incorporate and where that design is in your home. For example, you might have some interesting way of storing kitchen goods that others have done but you put it in a different part of the house. The approach overlaps, it works exactly the same when building a business.
Who is going to help you do it?
Modern business is often looked at through the lens of a taught framework to beginners. This framework called the Business Model Canvas teaches the building blocks of business. One of their main questions is about finding the right key partners. This step is incredibly important for the success rate of your business. If you misstep here you could face grieve consequences for your business.
The hardest bit of the Business Model Canvas is to translate what is on paper into reality. So, when you can answer all the important questions like consumers, logistics, partners etc. You need to test your assumptions. Prototyping is critical here. Try and do a small-scale experiment to see how the market reacts to your product or service. Create a prototype and get it in front of customers. Listen to their thoughts and take them into account when you make changes. It could make or break your product or service.
To summarize, testing your ideas in real-life situations should be at the core of your business idea. Execution should be the focus when you are trying to find your space in the market. Accepting that you will not be able to remake the wheel is ok. You just must give your customers what they want out of a product that you care about. Other logistics must be considered though so let the real world judge your idea.