So You Have a Great Business Idea – Now What?

So you’ve come up with a snazzy idea that’s sure to put money in the bank, eh? So what are you going to do about it? What’s your next step?
Most people do one of two things:

• They jump on the bandwagon before they know how to play, or
• They talk the subject to death, research it to death, make tons of notes–and do nothing.

Either way, they end up frustrated.

I know people who fall into both categories. You probably do, too. In fact, you may be one of these people. I was.

So how can you break out of this aggravating pattern and put yourself on the path to success?

Here are a couple of suggestions:

DO SOME RESEARCH

Take a little time to see if your idea will fly. Now I’m not talking about a full scale investigation that takes months or years to complete. Instead, spend a few hours on the Internet, scanning the search engines for relevant sites and posting a few questions in appropriate newsgroups (Has anybody done “x”? Where could I find more information on “z”?).

Put in some library time and look for resources at your favorite bookstore (either online or off). You’re looking to see if you have a ready target market, and if they’re already buying products and services similar to what you’re offering.

Why? Because chances are they’ll buy more of the same. If white widgets are all the rage and have been for months, chances are black, blue, or red widgets might make money as well. If no one’s buying widgets at all, stop. Do not pass go, do not collect $200.

Look elsewhere. Don’t waste time, money, and energy developing and trying to sell something no one wants.

“But I’ll be the first one on the block,” you might be thinking. “I’ll capture the market and make millions!”

Yes, I suppose there’s always that possibility. But don’t bet the farm on it.

While it is true that stories like that happen every once in a while, more often than not they come about by accident rather than design.
Silly Putty™ and Aspartame (NutraSweet™) were born from lab experiments gone awry, and the Yahoo! directory started as a list of favorite web sites by two Stanford University technophiles.

But many of the original ground breaking ideas that are common place today have very unglamorous and un-newsworthy histories of long hours, near bankruptcy, public disinterest and divorce. Such sordid tales are behind the Xerox machine, the typewriter, deodorant, and McDonald’s.

While persistence finally paid in each of these examples, you know there are hundreds of other casualties whose ideas never came to fruition.

Don’t try the hardest thing first. Mimic what’s already working, and get some success under your belt. You can always go back later and try the hard sell when your “tried-and-true” idea takes off and you don’t have anything better to do with your time and money…

If your idea looks viable, proceed to the next step. If not, find another idea and put it under your feasibility microscope.

MAKE A PLAN

Now you need to figure out how to go from idea to money in the bank. The best way to do this is by creating a business plan.

Now don’t be put off by the name. If you take the time to think through everything you’ll need to get from point A to point B, you’ll have both your “to do” list and your game plan by the time you’re ready to get started.

A business plan looks at things like:

• Licensing requirements
• Legal entity
• Hiring employees
• Scrutinizing the competition
• Your marketing plan
• Your funding requirements

In short, it forces you to take a big picture view of your business-which is really great, if you don’t have a business background. You’ll know what parts you can do, what parts you’ll need help with, and an estimate of how much it’s going to cost.

If you’re thinking about approaching a bank or investors for money, you’ll need a business plan to share with them. Other parties along the line might require a copy as well.

Your accounting, spreadsheet, or word processing software may have come with a business plan template, so look there first. If it you don’t have one, check out the Small Business Administration’s version or download a copy of BusinessPlan Pro.

So now you have your idea and your business plan. The next step?

EXECUTE THE PLAN

There comes a point when you need to stop gathering data and start gathering sales.

Everything doesn’t have to be perfect. Move forward. Learn. Try stuff. If something doesn’t work, try something else. A little success brings a lot of confidence; all you have to do is get started.

To quote Nike, “Just Do It!”

So you’ve got a great business idea! What do you do with it?

1. See if anyone wants to buy it
2. Make a plan
3. Execute the plan

Follow these three steps-and you’ll be in business!

Starting A Business: The Questions You Need to Ask

Most people start a business to make money.

Now this may seem obvious, but the high percentage of business failures clearly indicates that while the intentions are good, the execution is poor. Build a house without a blueprint and you’ll have a lopsided structure that could collapse at any minute. Build a business in the same fashion, and you’ll get an equally unstable result.

If you’re going to do it, do it right. Begin with the end in mind. If you know your destination, the itinerary comes together easily. If you don’t know where you’re going, you’ll be all over the map.

Here are the steps you need to consider:

1. Start With Something You Like To Do

Whether you’re looking for spending money or an entirely new career, start with something you enjoy doing. I’ve seen so many people “crash and burn” by running where they think the money is. As soon as the going gets tough, they quit.

Make a list of things you enjoying doing. This could be your line of work, your hobbies, or your “things to try in this lifetime” list.

2. Find Out What People Want

If you want other people to give you their money, you need to give them what they want in exchange. Find out what people are willing to pay for, and then start building your concept around that. So many people get this backward. They figure out what they want to sell instead of determining what others want to buy. Don’t make this mistake.

Research is the key. Fortunately, the Internet makes this fast and easy. Here are a few suggestions:

Go over to both Alexa.com and Technorati.com to see the most popular sites on the web in different categories. You can see the most visited sites web-wide, or the top Travel sites, Shopping sites, Entertainment sites, Health sites, etc. This gives you an idea of what people are looking for.

Sign up for the keyword ezine at Wordtracker.com.   This resource gives you the top 200 keywords people are searching for in the search engines. You’ll almost always see MP3, sex, Napster, Yahoo, and Britany Spears, but you’ll also see a lot of other phrases that will send your brain into overtime.  This week’s list including phrases like Travel, Disneyland, Paris, Food, Research, Song Lyrics, and Music. Any of your interest coincide with what others are looking for?

Check out the forums in your area of interest at places like Yahoo! Groups. Or, tool around Facebook for favorite groups.  You’ll see first hand what people are talking about, and you can ask questions, solve problems, and get some great ideas.

3. Determine Your Niche

Now that you know what you like to do and what others are looking for, try to create a niche. The narrower, the better. Let’s say that you like to shop when you travel. Travel is too broad. Shopping is too broad. Great shopping in New York City (or Detroit, Madrid, Moscow, etc.) is also too broad.
But great diamond shopping in New York City is a niche. Where to find car deals in Detroit is a niche. Stocking your bar with Spanish wines is a niche. Where to find jeans in Moscow is a niche.

Don’t be a little fish in a big pond. Be a big fish in a little pond. Dominating your niche allows you to do that. Define and dominate. It makes a bigger bank account.

4. Decide What To Do

If you’re working a full time job, running a house, spending time with your kids, etc., your time is at a premium. You need to be realistic in what you can do. If you like to travel and shop, your ultimate goal may be to conduct shopping tours or write about the different places to shop while you’re traveling the globe.
But don’t put your life on hold until you can have your goal. Work towards it. If you have 2 to 5 hours a week, for example, you have a couple of things you can do to make money and hone your skills. You could:

A. Write articles about the shopping in your area. You could sell this to your local newspaper travel and/or lifestyle sections, a regional magazine, national and international travel magazines, and national and international magazines in your area of interest (like diamonds, car deals, wines, and jeans, from above).

B. Create an information product about the shopping in your area for sale to travelers coming your way. My bookshelves have many such regional titles from our travels, including Plantations of Louisiana”, “The Decorative Iron Works of New Orleans”, “The Ghosts of Charlottesville and Albemarle”, “Texas Travel Guide”, “What To Do in San Francisco”, a copy of the Mayflower Compact of 1620, and so forth. We picked up most of them in the gift shops of the tourist places we visited.

C. Become an affiliate  for different programs in your area of interest. Focus, focus, focus, and deliver with a twist.

Love finding diamond deals in New York? Give tips and tricks of where to go and what to look for and become a reseller for airline tickets, hotel rooms, Broadway shows, and jewelry supplies like cleaners, safes, and insurance riders.

Know the best places to find wine in Spain? Write about local festivals and events and become a reseller for airline tickets, hotel rooms, restaurants, car rental, wine cellar supplies and books about wines.

The fastest, cheapest way to put up a web site and maintain control? Buy a Site Build It! license and follow the instructions.  Not only will this program walk you step-by-step through defining a niche and figuring out the marketing angle, it hosts your domain and handles all the technical web stuff so all you have to do is market. VERY cool!

5. Determine If It’s Feasible

Can you deliver your idea? If you have a fantasy about writing but can’t string two words together, taking a writing course. If you want to conduct shopping tours to the Big Apple, can you manage all the details that are involved? If you want to export Spanish wines, do you know all that’s entailed in exporting? If not, find out.

Sometimes you’ll discover that you’re in way over your head. That’s okay. The time to determine this is BEFORE you sink a lot of money into the venture. Now having said that, it doesn’t necessarily mean that you should “chunk” the idea. Rework it until it IS something you can manage. Start small. Grow. Learn.You can build it to your ideal later, when you have more resources and experience under your belt.

6. Test, Test, Test

Do you have a winner? You don’t know yet. Put it in front of some people who are likely to buy it and see if they do. If they don’t, change something – the title, the presentation, the sales pitch. Try it again. If they bite, you have a winner. If they don’t, change something else and try again. Try to find out why they are or are not buying. You’re looking for feedback at this point. You also want to work out “all the kinks” before it gets to market.

This is another area where so many people drop the ball. They roll out their product and assume it will be a best seller. On rare occasions, it is. More often then not, it isn’t.

Some people will like what you have. If you have a few sales, you’re striking a chord. But if your sales are very few in comparison to your traffic, you’re missing something that’s keeping more people from buying. Your task is to determine what that “something” is. Testing will tell you.

7. Promote, Promote, Promote

Once you have something people want and are willing to pay for, tell as many people as you can as often as you can. Don’t neglect the marketing. Only a handful of people are actively looking for what you have to offer. Everyone else is waiting for you to come to them. So go – and make it easy for them to buy from you.

Then keep in touch. If you they bought from you once, chances are, they’ll buy from you again.

Seem simple? It should be. Don’t make it more complicated than it is.

Good luck!

The Best Business to Start

As the owner of a business ideas website, I’m often asked, “What’s the ‘best’ business to start?”

The answer: The one that best suits your needs. Obviously this will be different for everyone. But let me give you some questions to ask yourself before beginning ANY new venture. I’ll use the “Who, What, Where, When, Why?” approach:

WHO Am I?

Knowing who you ARE is as important as knowing who you ARE NOT. If you’re a mild-mannered librarian from Metropolis, for example, then you are not a Las Vegas showgirl.

Obviously, right? Yet as apparent as this seems, I still see people start businesses or jump on business opportunities that have nothing to do with who they are or what they know. Starting a new venture is challenging enough without complicating the issue by tackling a product or service you know nothing about.

Give yourself a fighting chance: stick with the familiar.

WHAT Do I Want?

Determine what you want to get out of the effort. Do you want to:

• Get out of the house and earn an extra few hundred dollars of “mad money” every month?
• Replace your current income so you can tell your boss to take a hike?
• Make more money than you’ve ever made in your life?

Each one is going to require a different level of time and commitment. For some, a pre-tested business opportunity may fit the bill. For others, a start-from-scratch business may be the only way to go. Take your time to investigate; there’s a lot available either way.

But be realistic. If you work full time, have kids to chauffer around, a house to run, and other duties besides, then you’ll need something you can fit into your hectic schedule. If you’re retired and looking for a way to fill your time and meet interesting people, you may want something completely different.

WHERE Am I Now?

A lot of people jump into businesses before they’re really ready. It’s easy to do, especially if you find something you really like and are trying to get a way from something you really hate, like a boss or a commute or co-workers. Still, it’s important to think the matter through, and DO YOUR HOMEWORK. You know, the old Research and Development thing.

If you’re looking for some “mad money” and the extra income is optional, then trying a few different business opportunities to see what suits you best may be the way to go. But if you’re going to rely on the income (as in replacing your current job), you’ll need to take a more serious approach to the matter. Take the time to find what suits you. Learn what you need to know. LOOK BEFORE YOU LEAP.

If you fail to plan, you’re planning to fail. Know what you’ll need BEFORE you get started, or you’ll waste time, energy, and money in a desperate attempt to get the thing going.

WHEN Can I Get Started?

Now having told you to research and plan, don’t use that as an excuse NOT to get started. Don’t wait until the kids are grown or you retire or after your vacation or until next year. Start NOW.

Read, digest, learn. Begin to narrow down the ideas that are best for you. Get to understand the “big picture” of what it takes to run a business. Start some market research. Do SOMETHING.

As Confucius said, “A journey of a thousand miles begins with the first step.” Take it. You’ll reach your destination that much sooner.

WHY Look At The “Big Picture”?

Most people who start businesses don’t come from a business background. They’re good at some THING, so they start a business based on their talent or skill. Nothing wrong with that. But keep in mind that the product is only PART of the business equation. To have a SUCCESSFUL venture you need:

• A target market with money
• A product the target market wants
• A way to tell them about it (marketing)
• A way to get it to them (fulfillment)
• A way to manage the process (administration)
• A way to maintain the process (maintenance)
• A plan for doing all the above

Put you ego aside and be honest with yourself. Identify your strengths and weaknesses. If you have zero marketing skills, learn to market or find someone who will do it for you. If bookkeeping gives you hives, find a competent accountant or bookkeeper. If you’re not sure how to get started, read books or find a mentor. Try your local SCORE chapter.

Whatever you do, DON’T just ignore the parts of your business that aren’t as interesting to you as the others. I’ve seen too many disasters by people who have done this. If you know you’re not going to do something that needs to be done, own up to it from the start and find someone who can help. It may cost you some money-but it will probably be a lot less than leaving the thing undone.

HOW Do I Get Started

Imagine the perfect business for you:

• What would you be doing? Playing golf? Cooking? Unearthing dinosaurs?
• Where would you work? At home? Out of a suitcase? On the stage?
• When would you work? At night? When the kids go to school? October through March?
• Why this line of business? Fulfill a childhood dream? A favorite hobby? It’s all you know?
• How much money would you make each month? $500? $5,000? $50,000?

Now that you’ve imagined the perfect business, go make it happen!

The “perfect” opportunity is not going to find you — you have to find it or create it for yourself if it doesn’t exist. It’s not impossible. In fact, once you get started, you’ll discover how easy it can be and wonder why you didn’t get started sooner.

So what is the “best” business to start? Considering your interests, abilities, commitments, dreams, and income aspirations, the “best” business is the one that best suits your needs.

Good luck!

“Most successful men have not achieved their distinction by having some new talent or opportunity presented to them. They have developed the opportunity that was at hand.”–Bruce Marton

Startup Funds: 10 Places to Find Cash

You have an idea, you’ve done the research, you’ve finished the business plan, and you have an estimate of how much it’s going to cost to get it all off the ground.

The next step? Finding money.

Don’t let this be an obstacle to your dreams. Here are some places to look:

1. Savings and Investments

Depending on how much you’re looking at, you may be able to pull the amount from savings, CDs, stocks, or bonds.

2. Friends and Family

This is a time-honored tradition in some cultures and could be the best way to go, depending on your situation. However, exercise caution: your finances might become grist for the family rumor mill and you might create friction if something goes awry.

3. Credit Cards

Again, depending on how much you need, you could use the cash advance line on a credit card as an unsecured line of credit (albeit an expensive one). Look for low interest rates and cash advance fees. A recent Arthur Anderson survey of small and mid-sized businesses revealed that nearly 50% of all small businesses use credit cards in some capacity to get up and running.

4. Bank Loans

Frankly, bank loans are tough for startups to acquire. Usually banks loan money to companies that are stable and profitable or whose officers have a successful business background. They’re not impossible, however. Make sure you have your business plan in order before approaching your banker.

5. Personal or Home Equity Loan

Since bank loans can be difficult for first time businesses, you might try getting a personal loan using your personal property as collateral. That’s where 20% of businesses find their start up funds, according to that same Arthur Anderson survey.

6. Selling Personal Assets

If you have antiques, jewelry, collectibles, stocks, or real estate on your balance sheet, you might consider selling them to get your startup funds. A recent news story I saw reported that the antique jewelry market has seen a surge lately as more and more people sell unworn heirloom jewels to finance business startups.

7. SBA Guaranteed Loans

If you live in the United States, you might be able to get the Small Business Administration to back a bank loan. That means that while they don’t loan money themselves, the Small Business Administration will, upon reviewing your business plan, help you find and secure funds from the private sector. To learn more, visit the SBA site, http://www.sba.gov/financing/indexloans.html.

I don’t know what’s available outside the US, but you might try your local Business Information Centers, Chambers of Commerce, Employment Development Department, or similar entity.

8. U.S. Government Grants

Get startup money from Uncle Sam? Absolutely…if you’re a U.S. citizen. There are thousands of grants available for specific types of research, and it’s how both Donald Trump and Ross Perot got their start. You’ll need to dig a little, but you can find a comprehensive list of grants at:

The Catalog of Federal Domestic Assistance,
http://aspe.os.dhhs.gov/cfda/.

Also try:

The Foundation Center
http://fdncenter.org/

Fundraising and Grant Writing,
http://www.fundsnetservices.com/grantwri.htm

9. Angel (Personal) Investors

An Angel Investor is a person or entity willing to invest in your startup for a percentage of the equity. You MUST have your research and business plan done before you approach them. Typical investments stay in the five figure range.

An Angel’s biggest concern? Getting his money back. Angels also tend to invest in things they understand or participate in, so approach people who are going to be the users, suppliers, or people within the industry or market area. Don’t go after your technophobic lawyer to give you money for your mp3 idea, for example.

10. Venture Capital

Venture Capitalists look for highly profitable, very fast growing, early to mid-stage ventures. They seek almost immediate returns on their money, which often include funds from wealthy individuals and institutional investors (i.e., pension funds) looking for a high rate of return.
Often, they’ll want a lot of control, and will bring in their own people to “run the show.” Venture capitalists really like “hot” industries (high-tech, Internet, etc.) and companies that are poised to go public.

Want some other places to look? Check out these sites:

Business Finance — http://www.businessfinance.com
Vfinance — http://www.vfinance.com/
NVCA — http://www.nvca.org/

Ready? Set? Go find some startup money!