Planning your business - step by step

After you’ve chosen an idea, the next step is figure out if you idea has a good chance of succeeding or not.

You need to ask yourself a series of important questions such as:

• Is there a market out there that really needs my product?
  We need to make sure there is a large group of people out in the world who really need your product. I can’t tell you how often it turns out that only the founder of the business thought it was a great product, and that the rest of the world didn’t really care.
  
  
• How big is the market?
  Optimally, we want the market for our business to be as big as possible. Many people need soap. But not a lot of people need decorations for dog houses. Bigger markets are better!
  
  
• Is there enough profit foreseeable that I will be able to pay myself a salary and pay others to work with me?
  This is probable the most important place to start when considering whether you idea is good or not. Create a spreadsheet and do some guesstimating to see if your projected expenses and income leave you with a reasonable profit.You’d be surprised how often I see a person building a business but they haven’t yet calculated whether they will be able to create enough profit to pay all the bills and create a paycheck for themselves.  Here’s a simple spreadsheet you can use to do this >
  
  
• Do you know enough to build this business?
  Sometimes you’ll have an idea that seems great, but that you know very little about. For instance I would love to invent a freezer I can take camping so my ice won’t melt… but I know almost nothing about this sort of invention or manufacturing. It will be a lot harder since I just don’t know much about this kind of product. On the other hand I know a lot about websites, and software, so these will a be better fit for me.
  
  
• Can you raise the money to do it, or can you risk my own money? What about loans? or crowdfunding?
  Then comes the question of financing your business… what will it take to build it and make it work?
  
  If you can build a business that doesn’t cost too much, and you can use your own money to do it, that’s the best case because it’s the fastest way to go, with less strings attached. If you need to raise money from investors or get a loan, that makes things harder. If you’ve never raised money from investors this is something you’ll need to learn a lot about because it’s not easy normally.I don’t normally recommend loans because starting a business is risky and the last thing you want is a failed business and also $20,000 in debt you need to pay back to a bank. That’s a painful situation. Crowdfunding is very popular these days too, check our Kickstarter or GoFundMe or any of many others.
  
  
• Do you know enough about my business idea to start a business in this area?
  Optimally you will be an expert in the area you’re considering for your new business. I know a lot about websites and music. Those would be good areas for me because I am really an expert and know those areas deeply. Consider a business where you know the area deeply and have years of experience.
  
  
• Will you be able to hire people to help you with design, marketing, advertising, programming and whatever else is needed?
  There will be areas where you need to hire help, so make sure you are comfortable doing that and have enough money available. Building your team is an important consideration for many reasons.
  
  
• Can you convince others that this is a great idea?
  See if you can convince others to help you work on your idea. This is a great indicator that they really believe in your idea and that they aren’t just politely telling you that they do.
  
  
• What are your chances of success?
  All of these considerations should help you decide whether you have a good chance of success. The more positive your research is, the better your chances. Remember to use our simple, fast, free quiz here – it will give you a rating of possible success and will explain all the areas that you have strengths and weaknesses in: Business Evaluation Tool.
  
  
• Can you figure out how to market to the customer who wants your product?
  It’s one thing to say “I’ll market my product and things will be great” and it’s another thing to know where exactly you can find your customer so that you can get your message in front of them. Will you find them online? Offline? In stores? At events?Once you’ve found them, you’ll need to understand how to get them to understand why they need your product. This can require expert marketing copy and imagery. Do not underestimate how critical it is to have good ads, ad copy, imagery and how these all work together to create persuasive marketing.
  
  
• Who exactly is the customer for your product ?
  Marketing experts spend a lot of time learning EXACTLY who their target customer is, and creating a “target customer profile” so that they can really understand the habits, needs, patterns and preferences of their target customer. Do everything you can to understand your target customer. A great place to start is having verbal conversations with them to see if your product sounds exciting or useful and how badly they appear to need it.
  
  
• Does your target customer have enough money to pay for your product?
  It’s common to think of a great product idea, but then realize that your target customer can’t afford it… for example: a program that helps musicians with new songs to reach more people. The problem is that musicians are usually poor and many won’t be willing to pay for the service.
• How badly will your customer need or want your product?
• Will it be easy for others to duplicate your idea or to compete with you?
• Are there any legal reason that your business idea could become problematic?
• … and many other questions