But the big question after coming up with a great new idea is this: What now? This, in fact, is where most entrepreneurs stumble without ever getting started. Many of them start writing business plans, spending money and thinking about patents and trademarks. But that’s not what you need to do first!
Here is a six-step checklist of things to do before you can even justify writing a business plan, let alone investing money:
Step 1: Road Test Your Idea
This critical but often-skipped step has saved many a business owner or startup entrepreneur from certain failure. Before you write one word of a business plan, you need to honestly assess the validity of your idea, or the promise of your product in the real world. Think of it as a reality check on whether your idea is really the basis for a successful business, or more wishful thinking than you first thought.
A business plan won’t tell you this. That comes later once you’ve proven your concept. But that plan is guaranteed to be vastly more effective with the road test behind you. The steps that follow here will help you with your “road test.”
Step 2: Find the Fatal Flaw
Every business that flops has a fatal flaw of some kind; or perhaps many. Your mission is to find that flaw before it finds you. First, banish the thought that your idea is perfect. It’s not. One hallmark of success is a willingness to constantly question your own ideas.
Ask yourself: What am I missing? What possible pitfalls am I not seeing? How might competitors respond? What makes me think that my idea will work when so many others don’t?
But don’t stop there. You’re not just looking for things that might go wrong, you should also ask yourself how you might be able to fix them once you find them.
Step 3: Shed Common Myths and Misconceptions
* Here’s a big one: Nobody thought of this before. Really? Such ideas are rarer than rare. Odds are many have thought of it – and punted.
* There’s no competition, and that’s a good thing. Not necessarily. If it’s really such
a good idea, others should see that and be in there with you. If not, you’ve got to wonder.
* The concept is great, so the business opportunity must be great, too. “Concept” and “opportunity” are two different things. A huge chasm stands between a good concept and turning it into a viable business.
* I need to be on the market first in order to win. The business landscape is littered with defunct “firsts.” Watching the mistakes that others make, and then fixing them with your idea, is often a better strategy.
Step #4: Assess Your Risks — Realistically
There may be more risks than you think. For example, bringing a product to market involves many risks. Can you make it on a large enough scale to pay off? Does your product require users to change their behavior (consumers don’t like to do that). Will it last?
You must also assess market risks, existing or potential competitors, money (do you have enough?) and your own management limitations.
Step #5: Analyze the Market in Detail
Ask the fundamental questions: Is this really a good market? How big is it? But in doing that, you must also understand that a “market” means buyers, not just products. Your business or product will have to offer those buyers some clearly visible benefit in order for them to choose you over someone else.
Step #6: Define Your Team
Are you planning to go it alone, or will you need others involved in building your business and executing on your idea? This can mean working with outside advisors, or bringing in partners and employees. In any case, your “team” will be critical to your success.
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