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8 Ways to Turn a Great Idea into a Business
Whether you’re the kind of person who has
one groundbreaking idea in a lifetime or a dozen great smaller ones a day
, capitalizing on those ideas and turning them into an actual business can be a long and arduous road.
Every great entrepreneur at some point went from thought to conception, pulling the trigger on an idea and turning it into a successful business venture.
The steps to a lucrative business are many and varied, but by breaking down the process you can map out your plan to success.
Fortunately, a multitude of men and women have gone before you to navigate the pitfalls of free enterprise, and their successes and failures will teach you
how to turn your hot new business idea into a profitable company.
Do Your Research
The first tangible thing to do when starting your business is to research. Research lets you know how to turn an idea into a business. Knowing where to
start can be tricky. In the beginning, Kauffman Foundation contributor Alana Muller
writing a concept statement to help bridge the gap between idea and implementation.
Muller states, “When describing his/her business idea, the entrepreneur should answer the following questions: What is my product/service? What does my
product/service do? How is it different or better than other products/services? Who will buy the product/service? Why will they buy the product/service?
How will the product/service be promoted and sold/offered? Who are my competitors?”
Scott Anthony, managing partner at Innosight, recommended to the Harvard Business Review the DEFT method:
1. Document the idea
2. Evaluate the uncertainties
3. Focus on key uncertainties
4. Test various approaches
Without proper research, you may be directionless in your business venture. As Porch entrepreneur Matt Ehrlichman warns, “Without gathering some basic data, it can be too easy to
get excited and become emotionally invested in an idea that has no real place in the market.”
Gathering data is crucial to finding the exact coordinates at which you can plot your business.
You can do this in several ways. Simple search engine research will inform you about competitors and the size of the market, or if there is any demand at
all for your product. In addition, you can brainstorm ideas with team members and call potential customers to see how your ideas will play out in the real
Look for Market Validation
Entrepreneur writer Joe Sweeney defines market validation as “talking
to potential clients about their problems and pain points and getting ideas for how your idea for a product or service will solve them.” This fits under
the category of a “Lean Startup,” which goes against the traditional way of pitching an idea to investors.
The genius of market validation is that it fine-tunes your business venture ideas to be exactly what the market wants. Sweeney says, “Your customers will
tell you what they want the product to do, so rather than you thinking up and building something you hope your customers want, instead you build something
that solves the actual pain points of your customers.”
A great way to conduct market validation is by using Kickstarter, a crowdfunding platform that can help you get your ideas out there. Essentially
Kickstarter pitches your idea to the world and allows people to buy it while it is still a concept—before you manufacture a single widget. This allows you
to see if your idea is marketable and can be a great way to reduce risk, since you don’t have to spend money on prototypes or a first batch of your
Create an Advisory Board
A great way to help your fledgling business succeed is to have people who can be a soundboard for ideas and who can help you think objectively. You must
use discernment in listening to your advisory board. Many times their suggestions can save you from making a disastrous mistake, but their input can also
limit the potential of your business.
On the positive side of referring to advisors, Glenn Llopis quotes CEO Rich Melcombe’s advice: “If you want to be a successful entrepreneur, listen to
everyone because you never know when you will hear a good idea.” Melcombe recommends taking everything said with a grain of salt, accounting for their
backgrounds and familiarity with your idea.
On the other end of the spectrum, Llopis quotes CEO Brad Lea: “Although it is valuable to have a personal board of advisors, be careful not to let them
deter you from your vision. Steve Jobs’ board said he was “crazy” to enter into the cell phone space because it was saturated and it would not be worth the
long and laborious effort.”
Once you have an idea, create a plan, and built a team of advisors, you should have enough information to assess risk properly. You must do this in order
to go forward, both for your own sanity and for the security of your business. Risk is considered to be anything external that can affect your company in
Business Know-How contributor Daniel McGilvery suggests to consider “the possible impact of
new technology, legislative issues, changes in consumer demand and a variety of other issues that could negatively impact your business.”
Depending on the market of your business, your risk could assume anything from a competitor building a better product, like in the realm of computer
technology, to the government passing a law that would impact your business, such as in the realm of healthcare.
Create a Business Model
Having a business model means coming up with a written plan that can dictate the goals and procedures of your company without your having to be there. If
you were to take a month-long vacation, your business model would allow your company remained on autopilot.
Entrepreneur writer Brad Sugars notes that an effective business model ensures that a “business
plan, growth strategies and day-to-day "default activities" are on paper and shared with a team, not in the owner's head.”
Sugars also states that an effective business model allows for growth to be “built into the company’s structure.” It provides a plan for growing clientele
and replacing customers who leave your business.
Your business idea is great, and you’ve convinced your team of this. Now it’s time to convince investors to put their money down. This is often where the
rubber meets the road for entrepreneurs. Investors are smart and protective of their hard-earned cash. They know that
half of businesses fail in their first five years
. You must convince them that yours will not.
Fortunately, if you have conducted your research thoroughly, sharing your market research with investors will instill confidence in them. There is a lot of great advice out there for pitching your idea to investors, and
the more prepared you are the better off you will be.
One suggestion to capitalize on your fundraising is to prepare for the worst. Entrepreneur contributor Brad Sugars advises, “Many startups don't consider how expensive it can be to get customers, develop marketing
and fund working capital.” Pitch your worst-case scenario cost. If you aren’t comfortable with this, go back to the financial drawing board and get
comfortable with it. You can be sure investors will ask about the worst.
Ideas don’t manifest themselves, and in order to create a business from yours you’ll have to attack it with a passion. Being assertive is what capitalism
is all about—aggressively competing with others for a niche in the business world. Perhaps more than any other, this quality is essential to startup
Having the tenacity to pursue an idea will keep your business from dying in the startup phase. Gallup writer Dr. Sangeeta Badal
there is “a strong correlation between achievement orientation (a personal desire for achievement) and business success.”
According to their study, business professionals who strive for accomplishing their goals as quickly and efficiently as possible not only achieve more but
inspire those around them to do the same. They take risks and actively prevent problems. “These talents,” Badal writes, “trigger behaviors that ultimately
lead to business success.”
In addition to being assertive, you must also have the confidence that you have what it takes to succeed. At first, you can be assertive without being
confident, but that momentum will not last long if you don’t believe in your own capabilities. This common-sense fact is backed up by a plethora of
research. Gallup’s Dr. Badal cites that “self-efficacy—belief in one's ability to do a task well—has a high correlation to business creation and success.”
Confidence is especially important when you begin to involve others in your venture. You may believe in your idea and your own abilities, but you have to
be willing to stake the jobs of those you hire on that idea. Starting a business can involve a huge amount of responsibility and accountability.
Forbes writer Glenn Llopis notes this to be
one of the pitfalls to being a new entrepreneur. He says, “Most people fail to take an idea to fruition because the unexpected challenges become more than
they think they can handle and thus they no longer want to be accountable. They lose the belief in themselves to see things through all the way to the
Taking an idea from concept to market requires a commitment from you. You aren’t simply thinking of a great idea. You aren’t just providing a service to a
customer. You are committing to being in charge of a living, breathing operation that will affect others’ lives.
What steps have you taken to turn your business dreams into a reality? Let us know in the comments below:
Images: Pixabay, Pixabay
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