I have a great idea for a business but have no clue where to start.
Research is the one word that comes to mind as a logical starting point. While there could be any number of potential approaches, in my opinion there are three critical key research areas that need to be explored and answered comprehensively.
I would also make sure that this is what you want, and that you are passionate about what you do, because this is no walk in the park.
Know your industry
Do you know what’s happening in the industry/field you wish to explore and who your competitors are?
Without having a clear and good understanding of the industry sector you are about to enter, you will miss key trends that could influence your business positively or negatively, specifically relating to legislation, industry performance and customer expectations.
Know your competition
This ties in with knowing your competitors, the products they carry or services they offer. For example, is the market flooded? And if so, what will my competitive advantage be that would result in my success?
Maybe it is quality, pricing, or do you add something extra (e.g. do house calls as a doctor)?
So you need to know what prices your competitors are charging in order to compete rand for rand and if not, have a strategy that will position you with an advantage over your competitor which only you can do. Being aware of your strengths and weaknesses as well as theirs is critical.
Know your customers
Know your target market -who are your customers and do you know what they want?
Lots of people have great ideas, but without customers who are willing to put their money where their mouth is, you do not have a business. This may be an obvious statement, but very often we get caught up in the moment and forget to be practical.
There are no guarantees, nor am I saying do not take the risk, because that’s what entrepreneurs do, but when we are educated, we can make informed decisions.
Does what you have to offer (product/service) match up with what your customer wants at the right price, are you or the place you are going to operate from accessible to your customer? Then, when you get to the point of promoting your business, are you getting the attention of your potential target market – your customer?
Know your numbers
What money do you have to contribute and what money do you need?
In business you may have heard the saying “cash is king”. This is absolutely true, so do you have enough to start and see you through the first few months until you get on your feet? No matter what the business or size of the operation, without money it is going to be tough, although I didn’t say impossible.
Make sure you have a budget (financial plan) as well as a cash flow forecast, and try to have more money available than just what’s in the plan because in business (as with life) there will always be the unforeseen – so be prepared.
Then just a tip: when we put our own money in, we tend to be that much more focused. Also, if you can, do not draw a salary from your business until it is on its feet.
Go for it, take the opportunity but be prepared.