Developing a Basic Business Concept
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| Basic Business Concept |
When developing a business
concept is it most important to be mindful that your potential clients are
always looking for “value added” benefits in the products and services they
will purchase. Once you have a general idea of your business concept, I
recommend that you look at all of your opportunities from different
angles–always looking for ways of adding such value that it sets your product
or service apart from the competition. Creating a “unique” aspect for your business
will help to draw clients who are comfortable and somewhat loyal to another
business by offering them a value-added incentive for going elsewhere.
Every business idea will come with its own set of questions and opportunities to add value and to make your product/service more attractive to customers. One of the keys to success is to find a business concept that is suited for your personality, your current knowledge, and personal interest.
Begin With What You Already Know
To determine what kind of business would be best suited for you, simply start with what you know! If you have spent 20 years working as an accountant or if you build wooden trains as a hobby, consider how you can take that experience and turn it into a successful business. You may also find a great business idea right under your own nose! Take a look around your workplace. Do you see any needs that are unmet? Can you think of a better and more efficient way of doing something? If so, you may have a “seed” to grow a profitable business.
Do What You Love
It is important to create or choose a business that you will enjoy day after day. Many people start a business for the wrong reason–to get rich. While it is true that many millionaires in this country made their fortunes from their own ventures, this should not be your sole motivation for starting a business. Just because something seems like a “great opportunity” does not mean it is the right business for you. If you do not enjoy what you do, you will not be successful especially from a mental point of view. Of course monetary rewards can be a tremendous incentive; however the mental anguish of working in a business you do not enjoy can have a high price to pay and limit your success. I speak with Entrepreneurs so often who have successful businesses, but they are so unhappy and often suffer from fatigue and depression.
Here is the basic truth: If you do not enjoy what you do the business will become a chore and not a joy.
Do Not Reinvent the Wheel – Just make it Better!
Many first-time Entrepreneurs assume that they have to develop a new business idea to be unique and successful. That is simply not true. Most businesses are born not of innovation, but necessity. Instead of trying to come up with an idea that “changes the world”, take a look at the world around you and see where there may be a void to fill or a concept in need of improvement.
Many successful businesses are the result of taking an already established business concept and making improvements. Domino’s Pizza was certainly not the first to offer home pizza delivery, but it was the first to guarantee it would be delivered hot to your door in 30-minutes of less. Amazon.com was not the first company to sell books, but it was the first to let you buy books and publications from the comfort of your own home. Take a look around you and see what can be improved, restructured, or changed.
Focus on a Niche Market
Many businesses have gone bankrupt trying to be all things to all people. The ability to offer a billion products under one roof is wonderful for supergiant Wal-Mart, but not for most new businesses. Try to identify a niche that you would enjoy and build a business around it. If you love working outdoors, consider starting a landscaping business and focus on landscaping products and services. When is the last time your gardener did your taxes? I’m sure you get the general idea. Focus on a niche and become an expert in your field.
Consider the Franchising Option
Many new Entrepreneurs consider buying a Franchise operation instead of starting a business from scratch. Franchises are an excellent way to jumpstart the process because the Franchisor has already completed much of the hard work for you! They have a proven business model, established business guidelines, and have spent countless dollars on establishing the brand and advertising. Buying a Franchise can be a very expensive and involved process, however many find it the best avenue for Entrepreneurship. My advice is to investigate the Franchisor and the Franchise opportunity itself. You will want to use your own attorney (preferably a Franchise attorney) to review the UFOC and Franchise Agreement and advise you throughout the process of any “hidden meanings” and any “fine print”.
Above all, Take Your Time!
The time to think about a new business is when you still have a current source of income. Starting a business can be expensive and you should not expect to see a profit for possibly the first two years. Loans and grants are available to those who qualify, but not everyone does. You will want to have enough financial means to survive for at least the first year. Many Entrepreneurs do not even take a salary the first year because all of the money needs to be reinvested into the business. I suggest having an additional source of income-such as a spouse’s salary–for at least the first year of operation. It is true that some Entrepreneurs have made a profit straight out of the gate; however this is not the “norm” of how it works. Bringing on a partner to share in expenses is another idea; however you should investigate the pros and cons of doing so. There are many advantages of partnerships; however there are just as many disadvantages. Take as much time as you need for effective research, concept development, and financial planning. It is never a good idea to start a business out of desperation. Planning is the key to success without experiencing being over-stressed.
Every business idea will come with its own set of questions and opportunities to add value and to make your product/service more attractive to customers. One of the keys to success is to find a business concept that is suited for your personality, your current knowledge, and personal interest.
Begin With What You Already Know
To determine what kind of business would be best suited for you, simply start with what you know! If you have spent 20 years working as an accountant or if you build wooden trains as a hobby, consider how you can take that experience and turn it into a successful business. You may also find a great business idea right under your own nose! Take a look around your workplace. Do you see any needs that are unmet? Can you think of a better and more efficient way of doing something? If so, you may have a “seed” to grow a profitable business.
Do What You Love
It is important to create or choose a business that you will enjoy day after day. Many people start a business for the wrong reason–to get rich. While it is true that many millionaires in this country made their fortunes from their own ventures, this should not be your sole motivation for starting a business. Just because something seems like a “great opportunity” does not mean it is the right business for you. If you do not enjoy what you do, you will not be successful especially from a mental point of view. Of course monetary rewards can be a tremendous incentive; however the mental anguish of working in a business you do not enjoy can have a high price to pay and limit your success. I speak with Entrepreneurs so often who have successful businesses, but they are so unhappy and often suffer from fatigue and depression.
Here is the basic truth: If you do not enjoy what you do the business will become a chore and not a joy.
Do Not Reinvent the Wheel – Just make it Better!
Many first-time Entrepreneurs assume that they have to develop a new business idea to be unique and successful. That is simply not true. Most businesses are born not of innovation, but necessity. Instead of trying to come up with an idea that “changes the world”, take a look at the world around you and see where there may be a void to fill or a concept in need of improvement.
Many successful businesses are the result of taking an already established business concept and making improvements. Domino’s Pizza was certainly not the first to offer home pizza delivery, but it was the first to guarantee it would be delivered hot to your door in 30-minutes of less. Amazon.com was not the first company to sell books, but it was the first to let you buy books and publications from the comfort of your own home. Take a look around you and see what can be improved, restructured, or changed.
Focus on a Niche Market
Many businesses have gone bankrupt trying to be all things to all people. The ability to offer a billion products under one roof is wonderful for supergiant Wal-Mart, but not for most new businesses. Try to identify a niche that you would enjoy and build a business around it. If you love working outdoors, consider starting a landscaping business and focus on landscaping products and services. When is the last time your gardener did your taxes? I’m sure you get the general idea. Focus on a niche and become an expert in your field.
Consider the Franchising Option
Many new Entrepreneurs consider buying a Franchise operation instead of starting a business from scratch. Franchises are an excellent way to jumpstart the process because the Franchisor has already completed much of the hard work for you! They have a proven business model, established business guidelines, and have spent countless dollars on establishing the brand and advertising. Buying a Franchise can be a very expensive and involved process, however many find it the best avenue for Entrepreneurship. My advice is to investigate the Franchisor and the Franchise opportunity itself. You will want to use your own attorney (preferably a Franchise attorney) to review the UFOC and Franchise Agreement and advise you throughout the process of any “hidden meanings” and any “fine print”.
Above all, Take Your Time!
The time to think about a new business is when you still have a current source of income. Starting a business can be expensive and you should not expect to see a profit for possibly the first two years. Loans and grants are available to those who qualify, but not everyone does. You will want to have enough financial means to survive for at least the first year. Many Entrepreneurs do not even take a salary the first year because all of the money needs to be reinvested into the business. I suggest having an additional source of income-such as a spouse’s salary–for at least the first year of operation. It is true that some Entrepreneurs have made a profit straight out of the gate; however this is not the “norm” of how it works. Bringing on a partner to share in expenses is another idea; however you should investigate the pros and cons of doing so. There are many advantages of partnerships; however there are just as many disadvantages. Take as much time as you need for effective research, concept development, and financial planning. It is never a good idea to start a business out of desperation. Planning is the key to success without experiencing being over-stressed.
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