We often hear this from aspiring entrepreneurs: “I have an amazing idea. But where do I start? What are the first things I have to do to get this off the ground?”
So we’ve put together three steps to getting started. If you think you have a great business idea, work through these steps first and then you’ll be ready to move on to the next stage.
1. Step One: Write it down.
It might sound trite, but many good business ideas have been forgotten and lost because someone didn’t take five minutes to jot them down. You will find that writing your idea down will also help clarify it in your mind, and help when you’re trying to explain it to other people as well. If you can’t easily write your idea in five minutes, you haven’t got an idea – you have a bunch of jumbled thoughts. Go back and think about it some more.
2. Step Two: Do some basic market research
Yes, market research can be boring. Yes, it’s difficult and the information can be hard to find. But unless you know some basic things about your target market you have no idea whether or not your idea can be a success. Don’t charge off and invest time and money in an idea just because your friends think it’s good (more about this in another post, ‘Don’t listen to your friends’). This is what your first, basic market research should cover:
Target market: You will need to know the size of your target market. If you are selling your widget to mothers with young babies, how many of them are currently living in Australia? How many have money to spend on widgets (what are their spending activities)? How many will have a need for your widget? Be conservative in your estimates because a very common mistake is over-estimating your market.
The industry: You’ll need some information about the industry you are going into. What are the trends? Who are your competitors? Is the industry affected by anything currently going on in the world? Are there regulations and laws that apply to you?
3. Step Three: Identify what you need
You’ll need resources to get your business off the ground. What equipment do you need? Do you require a prototype, samples, a website or inventory? Make a comprehensive list of everything you think you might need. Then work out how much all this will cost. Can you afford it? Remember, no-one (not even the Government) is going to give you money to start a business. You need to do that on your own. Once you have your list, work out where you can cut start-up costs. Can you borrow equipment or buy it second-hand? What can you get by without?
These three steps are a great place to start when you think you have a business idea. You may find that you need to clarify what you want to do before you can get started, or that there really isn’t a big enough target market to support your business. You may realise that your idea requires such significant up front investment that you would rather try to come up with something easier to handle. All this is a great outcome – it means you can go back, refine the idea and avoid wasting valuable time and money on an idea that isn’t feasible.
However, if you make it through these three steps and you are still convinced it could work, you’re ready to move on to the next part of the process with the knowledge that your idea actually has real potential.