Having a great business idea is not enough
Think you’ve got a winning business idea? Adam Baker outlines five key things to consider if you're thinking about going it alone
How many times have you heard someone say “I’ve got a brilliant business idea” and then never do anything about it? Quite a few, right? Me too!
A couple of weeks ago I had a conversation with a guy, who is currently employed, about an idea he had. It was actually a good idea, in a niche that he could disrupt.
However, rather than evangalise about the potential of the business, he proceeded to spend the next 10 minutes telling me why he didn’t have time to write a business plan or create basic user cases for his web idea. Apparently his job and home life didn’t allow him even one hour a day to sit down and do it. I saw him again briefly yesterday and the first thing he said? “I still haven’t got round to doing it,” followed by an excuse.
Meanwhile, someone with a similar idea – you get where I’m going with this…
So, in my experience, there are five things to consider when thinking about starting up – and remember: procrastination killed the start-up:
1. Make time to evaluate your idea
If you have an idea, MAKE TIME to scope it out; document it; speak to people close to you that you trust; craft a plan detailing the purpose of the venture, how you will get traction, your marketing strategy and how you’ll make money. You will quickly discover if your idea is as nailed-on as you first thought.
2. Don’t use your job as an excuse
Many, many first-time founders start their businesses while employed somewhere else. Don’t use employment as an excuse not to deep dive into researching a business idea. In fact, I positively encourage people to retain employment while developing their business, only moving into the project full time when they have reached a proof of concept and are confident they have something. (NOTE: Avoid a mistake I’ve made and tell your employer what you’re doing. They’ll be fine about it, so long as you’re transparent).
3. Have clear targets
Set yourself realistic metrics for success and milestones in which to achieve them. Use the metrics to underpin any business decisions you make. These goals should be what you want to achieve from the business over a defined period of time, and everything you do should be focused on delivering these objectives.
For example: number of paying customers, unique visitors to your website, number of partnerships, revenue forecasts or press coverage. What are the important metrics for your business?
Poor forecasting or mismanaging expectations is one of the most dangerous things you can do as a start-up. If you think you’ll only turnover £10,000 in year one, plan for that. Do not plug large numbers into your revenue forecasts because that’s what break-even looks like. Scale back costs if you have to, but forecast revenue projections realistically.
4. Understand the reality of starting a business
Be sure you know what you’re getting into. Running any business is hard but managing and growing a start-up from scratch is often very challenging. Be prepared for your original idea to fail. I would almost guarantee that your business will not look exactly like you think it will in 12 months from now. By setting metrics for success, you’ll be able to spot gaps early and address them. Have a Plan B lined up and be prepared to pivot.
If you are in a relationship, make sure it’s a strong, supportive one. I kid you not, this is massively important. Your partner needs to understand what they are getting into, just as much as you do. Long, long hours, not “leaving” the job in the office, working weekends, no holidays, tightening the financial belt, maybe borrowing money. All of these things, I know, put a strain on the best of relationships. You are both going to need to make the sacrifices.
5. Don’t leave it too late
Don’t procrastinate; get your product to market. As I alluded to in rule number 4, you’ll most likely change your model and refine your product down the line, so don’t try and get the perfect product, get it to market and learn.
This is especially true for technology/web businesses. The beauty of a web-based business is how agile it is. Develop a beta version quickly and get people using it. The best feedback you’ll get will come from your users and customers. Why procrastinate on getting every pixel perfect or refining your product until every last detail is right, when you don’t even know if your new customers will like it?
Build a version that is robust and fit for purpose and launch. Then aggressively learn and iterate.
Finally, why are you thinking of starting a business?
The term “entrepreneur” is over-used and I’m not actually sure what it means. A search for the definition of entrepreneur returns this:
1. A person who organises and operates a business or businesses, taking on financial risk to do so. 2. A promoter in the entertainment industry
I believe that you either have an entrepreneurial instinct or you don’t. I also believe that being an “entrepreneur” doesn’t mean you have to start your own business. You can be a hugely successful business person, demonstrating brilliant entrepreneurial qualities, while working for someone else.
If you’re starting a business because you want to be an “entrepreneur”, STOP. Don’t do it. Stay in your day job and display your exceptional “entrepreneur” skills working for someone else. If it’s the business idea you have and the passion for leading change, innovating and disrupting that is driving you to start a business, GO FOR IT.
It will be the best career move you’ll ever make.