Inspiration has struck you with a genius idea for a business, but how exactly do you transfer your idea scribbled on a napkin into a full sustainable company? It’s been done before, yet many companies took a unique path that cannot easily be duplicated.
However, there are some fundamental steps that every new entrepreneur can take to get their idea in motion. Take these 8 steps to turn your idea into a functioning business.
1. Figure out what problem is being solved
When you strip a company down to its core function, you’ll find that it solves a problem. Right now, you’re probably infatuated with your idea and are focused on the solution it provides. Many businesses claim to have solutions, but what specific problem are they really eliminating?
Amazon, for instance, solved how e-commerce was, at one time, expensive and inconvenient. Today, it has more customers (and sales) than its brick-and-mortar competition.
Bottom line: all successful companies, products, or services enhance the lives of their customers by eliminating a problem.
2. Find your market
Picture who your ideal user is – this is the first step to actually figuring out where your idea fits into a sea of consumers. They all have different habits and needs to fulfill, yet are facing the same problem. Figure out where your solution will fit into the market and in the lives of people.
One of the biggest mistakes startups make is the failure to get people to understand and want the product or service. If it turns out that your idea isn’t being “sold” to your audience, don’t blame the market. Instead, figure out what they find compelling, or what it will take to get them to want something different than what they already have
You have a solution, but it needs to be in front of the right people to be seen as such.
3. Find your support
“Have you ever noticed how few successful startups were founded by just one person?”
This question was raised by Paul Graham, co-founder of the startup incubator Y Combinator, when he was addressing mistakes startups make that ultimately lead to failure.
Having business partners has several benefits, especially when you’re first starting out. They can act as support, a sounding board for your ideas, and provide evidence to others that you actually have a good idea. Aside from building a team, having relationships with other entrepreneurs will give you invaluable knowledge. Find seasoned entrepreneurs and spark conversations with them. Pick their brains – people love to talk about themselves, so they’ll be happy to share what they have learned from their experience with starting a business.
4. Create a financial model and plan the first phase
Since you have your market research done, now you must figure out if it’s financially viable. Create a “bottom-up” financial model that focuses on how your product or service is created, marketed, and sold to an individual user. Doing this will give you more insight on how your business will function. Then, to verify your projections, create another financial model that is “top-down,” which examines the size of your market and what goals you need to reach to turn a profit.
Once you’re satisfied with your financial model, begin moving into planning the first phase of your business. This plan is simple – get your ideas out. For discussion purposes among your team and mentors, map out your mission, objective, keys to success, target market, competitive advantage, and basic strategies. It ensures that everyone involved is on the same page and set to proceed into the next stages.
5. Figure out your source of capital
Entrepreneurs generally don’t start out just for the money, but money is still needed to get the business off the ground. Some attainable sources of funding are self-funding, money from people you know (friends and family), credit cards, or loans. Depending on the amount you need, a more helpful source can be angel investors and venture capitalists looking to back your mission for a slice of the profits and room for decision-making.
Whatever source(s) you choose to obtain or to aim for, consider that each one has their own rewards and risks.
6. Build the MVP
The MVP, or minimal viable product, provides you with the feedback you need before putting your idea on the market. After all, it’s of no use to anyone if you build a product customers don’t want.
Minimal does not necessarily mean “basic.” The point is not to build a minimal product, but a product that is already great (viable), yet has room to improve (minimal). It’s how early adopters actually jump on board to use the product and, if they like it, will provide you the feedback to make it better for them.
7. Find the pivot
The information gathered from your early adopters helps you figure out what works and what garnered the most response from your audience. You might find that their feedback is entirely different than what you expected and planned for.
This can lead you to “pivot” your business model, or change a fundamental part of it. Changing direction doesn’t mean you failed entirely; it actually helps to prevent failures you may have encountered. Pivoting doesn’t necessarily mean abandoning everything you learned – it’s about taking what you learned and using it for your new direction. You took one route to a destination and got lost; pivoting is just recalculating a different route to get there.
8. Stay positive
They say misery loves company – just make sure there is no misery involved with your new business. Self-doubt and questioning if something will go wrong will only hold you back from taking the necessary risks. People will question your ideas and your business, but if they don’t believe in your ability to overcome it, they are perpetuating their negativity into you. When you stay above the negativity and stay positive, it will make it easier when you eventually do make a mistake or face an obstacle. And you will face both.
Your journey to building a sustainable business won’t be like most processes, simply because there is no guarantee for success. All you can do is adapt your idea and see what works. If at first you don’t succeed with it, try and try again until you do.