Turning Your Idea Into a Successful Business
There's no doubt that successful businesses start with brilliant ideas. In today's fiercely competitive environment, innovation is the ammunition entrepreneurs need to stand out in the crowd.
Many newcomers to the business world may assume that starting a new business is necessarily linked to an invention. While this may play an important part in some pioneering companies, most business concepts are in fact all about tweaking existing ideas or finding new ways to do old things.
However, finding the right niche, based on what you do best and the potential market situation, demands both careful planning and research. Even the best products may not necessarily find buyers because markets change, and customers are capricious.
There are no clear recipes for starting a new business, but here are a few guidelines that can help you get going in the right direction.
Look for windows of opportunity
Astute observation is your best ally when looking for unique ideas. Start by assessing exactly what you do well. It's a much safer bet to venture into familiar territory where you can use your existing strengths. For example, if you work in the pharmaceutical industry then you could branch out into health care.
Here are some helpful hints:
- Do what you're passionate about. Enthusiasm ignites the interest of lenders. Choose ideas that enable you to act now. You need to move swiftly before your idea fizzles.
- Be specific about your business goals. For example, you want to reach this specific market with a specific product.
- Look around you for windows of opportunity such as taking over a family business.
- Start a business doing something that your existing company isn't doing.
- Keep your eye on the franchise market.
- Read business publications and stay informed of growth areas. For example, the rapidly changing health sector, fueled by the explosion of biotechnology, provides endless business opportunities.
Find your market niche / Find yourself a customer
The potential success of a product or service involves a myriad of factors, including the design, features, potential profit margin and sales volume projections.
Apart from patenting inventions, you can assess these possibilities for product development.
- New product lines that are absolutely new to the market and enable you to create your own niche, revolutionize or create markets.
- Product revisions/replacements that enable you to build on your existing product line.
- Repositioned products, that uncover new applications for your products or new customers for current products.
- Products that copy those produced by others, but where there is a market for many competing versions.
Use the following quick checklist when defining your market niche.
- What are the needs of your prospective customers? Ask yourself: How will your business meet those needs? Identify unmet needs.
- What are your customer's desires? A market need could also be a deficiency, for example, a product that lacks post-sales service.
- What problems does your product or service solve? Does it make your customer's life simpler?
It’s important to define your ideal customers clearly.
- Who exactly are my target customers?
- Why do my customers buy?
- How do my customers define value?
- What makes my product or service superior to that of my competitors?
- Why do my prospective customers buy from my competitors?
- How can I offset that perception and get my competitors’ customers to buy from me?
Present your idea with a strong business plan
Take your creative thinking and put it on paper. A business plan is your tool to sell your idea to lenders, investors and existing shareholders. Lack of clarity, poor information, and the absence of a strategic orientation are the main deficiencies in most business plans.
Make sure you allow time to put a plan together with all the appropriate details, such as positioning, market analysis and financials. Projects developed with the help of an expert in the target market get the best reception.
Get yourself a mentor
Getting a business off the ground is not an easy task. Many projects never amount to much because they are not taken seriously, or because they lack adequate follow-up or support.
You will increase your chances of success considerably by seeking advice from someone with business experience, often called a mentor. These business leaders provide management advice, suggest sources of financing, and frequently offer their young protégés internship opportunities to hone leadership qualities in the field.
Nine  common mistakes to avoid
If you’re like many new entrepreneurs, you’re fired up about your business idea and eager to launch your company into the world. But it’s worth stepping back and making sure you avoid some common mistakes that plague many new businesses. Making the right moves in the beginning can help you avoid major headaches later.
1. Neglecting to make a business plan
Many rookie entrepreneurs fail to prepare a business plan. Such a document doesn’t need to be especially long or detailed. But taking the time to chart a business plan will help keep your efforts consistent, serve as a rallying point for your team and give milestones to measure your progress.
2. Inadequate financial preparation and resources
It’s common for entrepreneurs to neglect financial planning and lowball how much capital they’ll need to get their business up and running. The result is often inadequate financing to achieve your goals and/or a cash squeeze just as the business is hitting its stride.
To avoid such problems, be sure to prepare financial projections for your new business, especially for the first 12 months. This can also help you secure financing and investments.
3. Failing to monitor progress and adjust
your business plan and financial projections gather dust. Make them living documents by continuously monitoring your progress and updating your plan and projections.
4. Buying assets with your cash flow
A frequent mistake that can cause a cash shortage is using your operating cash to pay for long-term assets. Instead, when determining how you’ll pay for major purchases such as equipment, machinery or major IT outlays, consider using a business loan that has a term matching the asset’s lifespan. (For example, a seven-year loan for a vehicle you expect to use seven years).
5. Avoiding outside help
Many new entrepreneurs are reluctant to admit they need help. Don’t be shy about seeking a mentor, hiring an outside consultant or creating an advisory board to give you support and ideas.
6. Setting the wrong price
Don’t make the mistake of setting your prices based solely on what the competition charges. It’s important to research your costs in detail for each of your products when deciding what to charge. Also, monitor actual costs as you go to make any needed adjustments.
7. Ignoring technology
Canadian businesses lag their U.S. counterparts in technology investments and that affects our productivity. Be sure to consider how technology could pay off for your business with improved growth, efficiency and profitability.
8. Neglecting online marketing
Be sure to consider ways to harness the marketing potential of the Internet. For example, ads on social media platforms can be a cost-effective and easy way to target specific market segments.
9. Failing to learn
As you start your business, learn from your initial missteps, and use them to guide your eventual success. Remember that many winning entrepreneurs failed in their first attempts but came back to thrive after studying what went wrong and improving.
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