OVERVIEWStarting a new business is both exciting and risky. Over the past few years I have met with many entrepreneurs and reviewed many business plans. Tremendous talent and creativity exists in our society and technology is enabling innovation whether it be products, processes, or services. However the time to realize the value of the promoters’ investment is influenced by a huge amount of variables and these tips are designed to give some pointers to entrepreneurs considering a new venture or in the early stages of start up.
Validate Market; you must prove that a market exists and define it, i.e. ID customers, groups, size and spend. Is it static? declining? or growing? It’s more attractive if it’s growing because you are not trying to take a share from a competitor. A good business idea does not mean there is a market, and only in very rare circumstances are you creating a new market.
Confirm Competition; if there is no competition it is likely there is no market. The biggest competitive threat for start up’s is the potential that a client will do nothing, because they do not see your value proposition.
Define Business Model; Have a clear and defined business model (How we make money!). Model it, identify revenue and cost drivers and convert to a P & L. Make sure you have a primary revenue stream, it confirms the business has a focus.
Carry out Feasibility; before you invest significant, time and money, talk to the target customers and market, present your business and confirm the market exists and the proposed value proposition is accepted.
Create a Team; rarely will the initial promoter (s) have all the skills required to launch a successful business, know the gaps and how you will fill the gaps even on a temporary or part time basis.
Engage with Public Support Mechanisms: There are many supports available, not just financial, but advisory, marketing and incubation programs, find the ones that suit your business and engage early with them. (EI, INI, BIC’s, Trade Associations – in Ireland).
Prepare a 10 page business plan; any less and your analysis and detail are likely to be incomplete, much more and your focus is likely to be suboptimal. The business plan helps stakeholders understand the roadmap and milestones you (They) are committing to.
Don’t boil the ocean; Focus on core business and core model. Define the minimum spec. for your product or service to enter the market and get selling quickly. Customer and market feedback will help refine the plan. You will confirm customer value as they will be parting with money, and you get to market quickly (Be Agile)
Adopt good business practice; as appropriate for scale and maturity of business apply good process, practice and governance. It really pays back, helps control the business performance and demonstrates to stakeholders it’s in control (avoids exit transaction issues)
Adapt & Respond Don’t be afraid to change the business as you learn in the Market & Terminate the business quickly if it is failing