As a small business consultant, I am often approached by people who have an idea for a business and want my thoughts on whether it is a good idea or not. I find that I give those people the same advice almost regardless of what their idea is or who they are. In a nutshell I tell them “I’m sure your idea is fine. The questions you should be asking yourself is how will you make your business successful and are you the person to do it?”
So, let’s break down that bit of advice into its component parts. There are three: Your idea, your strategy, and you.
In a world seemingly busting at the seams with both good and bad ideas, how does yours rate? Many first time entrepreneurs feel that finding the right idea is similar to a quest for the Holy Grail. It is not. My favorite example of this comes from the movie “Office Space” where the idea of the Pet Rock is discussed, “Sure it was [a good idea]. The guy made a million dollars.” Funny, perhaps, but probably not far from the truth. Gary Dahl, the inventor of Pet Rocks, did make money selling Pet Rocks and even sold the rights to Pet Rocks as recently as 2009. Arguably an awful idea, Pet Rocks actually had a lot of quirky charm as the marketing around them was filled with puns and play on words. And, it was this, not the sale of rocks at incredible markups, which Dahl netted his profits from.
The point is, ideas, in and of themselves, rarely have much value one way or another. It is nearly impossible to say one is good while another is bad. We all have that friend who shouts from their couch at commercials that the product is stupid, or that they thought of it years ago. What is the difference between them and the person who is making all that money selling those products and/or services? Effort.
So, when considering a business idea, simply ask yourself if you are a reasonable and intelligent person who is capable of coming up with a sound business idea. If the answer is “yes” then you have what may be a successful low investment business idea, regardless if it is a good or bad one.
Next is your strategy. Strategy is a funny word in the context of business because it essentially gets boiled down to having a sound approach. A lot of meaningless terms get used and misused in the world of business strategy. My personal favorite example is “first mover advantage.” In reality, “the first mover advantage” is often the “first mover disadvantage” as you’ll hit every roadblock along the way and others get to learn from your mistakes. Don’t let little truisms and phrases be the building blocks of your strategy.
Ask yourself, now that you have an idea, how are you going to really make it a business? The most common misconception here is that strategies that you have seen deployed at an existing business will have any bearing upon your new business idea. There is a huge difference between what is commonly referred to as Corporate Strategy (which is what most any business that has been around for more than 2-3 years use) and New Venture Strategy (which is what you and your new business idea will have). to use to get started).
The new venture strategy you use is paramount to the success of your idea. Far more than the idea itself. But, don’t expect most people to know how to play the new venture strategy game. It is unique and subtle, but can be mastered by really thinking deeply about how you are going to get your idea in front of the people who might buy it. “Market Acquisition” (admittedly, another overused and often misused strategy word) will be the most crucial aspect of what you do to make your idea a successful business. As of day one, nobody knows who you are or what you do. How do you plan to change that, in such a dramatic way that you can actually make a business out of it?
Make sure to run your ideas by lots of people and gain as much feedback as you possibly can. If you know a successful entrepreneur, you will definitely get their thoughts as they will be invaluable. This is also a wonderful time to learn one of the most important rules of running any business, regardless of size, which is to ensure you are not just asking people who confirm whatever you say just to make you happy. Critique and refining of your plan are the keys to doing this part right.
Last, but most important, is you. There are countless examples of entrepreneurs with seemingly great ideas and wonderful strategies whose businesses never see the light of day because they simply are not the ones to bring their idea to the world. Do some honest reflection. Not just about who you are, but who you are within the context of your business idea. Are you really the person who can make this idea a successful business? Do you know the industry or at least have relevant contacts? Probably most important, do you have the time, effort, and dedication to really see this through?
One thing a lot of people get stuck on at this stage is money. I have met dozens of people who tell me they have a great idea and
strategy but they would need some amount of money, which they inevitably do not have, to make a real go at it. This, more often than not, is simply a convenient excuse to rationalize wimping out and not following through on what might otherwise be a great business. Money is always out there. There are friends and family who might be willing to support your business idea. If not, there are angel investors and plenty of people who would love to fund interesting and exciting ideas. Want to know what these people look for, first and foremost, when you approach them looking to have them invest? When you are pitching your idea, they are analyzing your strategy, and even more closely, you. If you present a convincing strategy, that’s great. But, if you can show that you have the requisite skills to make that plan successful, few investors will care what your idea is – a winner is a winner.
So, don’t sweat your idea. There are a million businesses out there for which the underlying business ideas sound borderline ridiculous. But, behind most of those ridiculous ideas is a person who is very happy running their own company and often making quite a bit more money than they were before they started. The key to their success was not having a moment of brilliance and simply cashing in on it – it took a solid strategy and then a lot of effort to execute on it. So, take your ideas, examine them deeply, devise winning strategies and then, finally and most importantly, analyze yourself in the context of those strategies. It is certainly more effort than just coming up with the idea itself. But, it is also far more likely to turn your idea into a business and, more importantly, turn you from just another person with an interesting idea into a successful entrepreneur.