Narrowing down a business idea is the first step of entrepreneurship. According to startupmindset.com, running a successful business will need a lot of due diligence on your part. Here are things you might consider doing before you launch the business:
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Run the idea by friends, family, and colleagues
Source: Entrepreneur
Your business idea might sound ideal in your head, but it is important to talk it out with other people. Seek the insight of your trusted associates to help in perfecting the concept. Colleagues may point out factors you may have missed or overlooked as well as current and future trends. Some queries to present include: do you think the venture has potential? How can I make it better?
Your family and friends come in handy when you want to know if potential customers will want to buy your product. What features would they be excited to see added in your offering? Would they recommend your business? Their answers will give you a rough idea of how your business will be perceived by consumers.
Research the Market
Source: Life Hacks – TAC SHE
Proper research can be a game-changing tool for your business. It is not just enough to seek the counsel of your associates and family as you will need to conduct an in-depth analysis of your potential customer base. You should basically aim to know if there are enough customers who would be interested in your product and if the price at which they are willing to pay is sufficient to make your business feasible.
You can use online tools to evaluate the popularity of keywords related to your business. Research your competition too by looking at how they offer the products and what customers say about them. The intention is to evaluate their strengths and determine how you can improve them.
Additionally, seek out your potential customers at places where they spend their time the most. If you have a prototype, offer them samples and gather feedback. You also need to isolate a niche that you will be serving via a thorough analysis of the market.
Develop a Plan
Source: Jeff Shore
A business plan is quite simply a game plan which you will be consulting a lot as your business finds its feet.
It should open with an executive summary which includes an overview of the elements of your venture. A company description offers an accurate representation of your field and the position of your company. It is good practice to also provide an analysis of the market and competition to illustrate the market share your business will enjoy.
Your strategies and goals should also be well laid out. Strategies are the means to an end while goals are the end. The products and services should match to this tactical combination. Your management structure is an essential element of the plan as it clearly communicates to the personnel the organization hierarchy to encourage efficient communication. The next step is to identify the best sales and marketing channels not only to ensure that you are advertising your brand efficiently, but that you are promoting it to the target customers.
Test Your Idea
Source: The Balance Small Business
Testing a business idea involves conducting small experiments to determine the feasibility of your venture.
One way of testing a business concept is creating a minimum viable product. This is a version of your product with just the core function and which you can actually sell. Take the product to your target customers and seek qualitative feedback. You can use focus groups, interviews, and social media groups. A prototype can even be a simple website designed to represent your future company with which you can gather email addresses from interested consumers. This step is all about making your idea real so that consumers can get a feel of your product/service.
Estimate Startup Funds Needed
Source: Forbes
Now that you have your objective and plans laid out, you need money to get things going. You will need to estimate the various costs of running your business and keep it going for a while before it can generate money to make itself feasible.
Most entrepreneurs begin with bootstrapping. This means that you will be gathering all personal funds you can and it means that you won’t have any loans cutting away at your profits. If you want to scale up fast, you need to look out for alternative resources. Bank loans and loans from organizations that lend to entrepreneurs will generally attract principal and interest. You can also seek investors, especially if your business is a tech startup.
