How Business Ideas Are Developed
By definition, entrepreneurs attempt to meet a need in a new way. For aspiring entrepreneurs however, coming up with compelling business ideas might be challenging. Have you ever had a brilliant idea come to you only to faze out eventually because you don’t know how to take your startup to the next level?
Here is a detailed step-by-step approach to help you develop your concept. While the number of steps involved can seem overwhelming, you'll be well on your way to a successful launch if you break these down:
Jot Down Your Thoughts: Remember the brainstorming golden rule: There are no bad ideas. As your thoughts flow, write them down so you can later trim the list to focus on your strongest ideas. With the right brainstorming questions, you can develop a list of business ideas that fill market gaps, improve existing products, and make daily living easier.
Discuss Your Idea with Trusted Allies: Don't keep a good business concept to yourself if you think it has real potential. Share it with trusted associates for feedback on honing and improving your vision, especially if they're in your target market as a prospective consumer for your idea. While receiving honest feedback might be difficult to absorb, it is a key first step in turning your concept into a reality.
Conduct a Market Research & a Competitive Analysis: After refining your idea, you'll need to conduct some market research. Competitive analysis is a great method to predict and compare how your business will fare against your industry competitors. Is your company capable of filling a need that others have overlooked? Where are you going to get your customers? Is there a similar unsuccessful business you can look at? What will you do differently to succeed? Try to identify potential partners during this process; you may discover information that prompts you to restructure or reevaluate your initial concept, which is critical throughout the planning stage. Is there a niche market you can go after? What competitive edge can you create?
Develop a Business Plan: Business plans, whether formal or informal, help you organize the main elements of your company before launching it. You'll get a clear picture of the 9 components that make up your business model: customer segments, value propositions, channels needed to reach out to clients, customer relationships, revenue streams, key resources, activities that create value, key partners, and cost structure.
Choose Your Legal Business Type: You’ll need to figure out the type of business you plan to operate. You are more likely to be a sole proprietor if you’re on your own, where your P&Ls are part of your personal income tax return. Alternatively, you might form a limited liability corporation (LLC), which provides some protection from creditors if, hopefully not, your business fails. Whichever method you choose, you’ll need to register your business with your local government.
Create Your Model/Prototype: This phase focuses on bringing your idea to life to test out whether or not real consumers will bite. You don't necessarily have to create a finished product right away; the goal is to verify that some people are willing to pay for what you're planning to create. A prototype might be something as basic as a website that represents your future company or a blog that will help you find a following.
Execute a Market Survey & Develop Your Final Product: No business ought to be launched without the execution of a market survey. Websites such as Survey Monkey transcend geographic boundaries, allowing you to create an online questionnaire directly sent to your targeted audience. Another option is to hold a focus group session either before or after your Minimum Viable Product is completed. This is where you invite people from your targeted demographics to participate in a group discussion, gathering real time feedback on the virtues and vices of your product or service. The next step would be to make the necessary modifications and alterations to the final product.
Raise Funds: Consider how much money you’ll need to get started, and how you intend to fund your new business. Personal savings or borrowing money from family and friends are both viable options for financing. Another alternative is to borrow money from a bank, approach outside investors, or use crowdfunding which allows aspiring entrepreneurs to raise money through micro-donations.
Plan Your Opening: A number of activities need to occur before you launch, depending on the type of business you've chosen. If you own a retail store for example, you'll need to hire people, acquire inventory and plan a grand opening. If you're starting a small business, you'll need to develop a website and start marketing online.
