When you experience a problem, it’s easy to ask “why hasn’t anyone thought of something to fix this yet?” or “why isn’t there a better way to do this?” The immediate next thought, then, is usually “maybe I could fix it.” And that’s where great ideas for new companies are often born — from a problem and a spark. But when you’re inspired, it can be difficult to be pragmatic, and to ask yourself? Does this have legs? Is it a good idea? Can I do it?
Those aren’t exactly the right questions, though.
Career coach Beate Chelette has helped small business owners turn the their big ideas into real, successful businesses that are both financially rewarding and personally fulfilling. And, she says, the idea really is the first step.
“We have ideas because we want to change somebody’s life. We want to make it better,” she says. “That’s what it’s about. But how do we define this idea and make it something that somebody wants and pays good money for it?”
Plenty of people operate businesses that make them feel good, but if you’re serious about supporting yourself and your family, you’ve got to ensure that you’re thinking clearly about the future of the business, and positioning it in a way that sets it up for growth.
Question 1: Does the market exist?
First, determine what kind of a business you have, says Beate. Are you entering a market that already exists, or are you contributing something completely new?
To explain this better, she uses what she calls “the pie analogy.”
“The pie analogy goes like this: You can either bake your own pie, which means you can go into a business that doesn’t exist, or you go into an existing market and, with enough time, determination, and input, you cut yourself a slice.”
Question 2: Why am I doing this?
Then, ask yourself why you’re starting your business. This question is actually made up of a lot of smaller questions, all of which also need to be answered, but this is a good place to start.
What does your business offer to the world? If a market already exists, how does your idea add to it, or challenge what’s already available. If it’s a completely new market, why is it necessary? Which brings us to the third question, which is…
Question 3: What’s the problem?
Businesses exist to make people’s lives better or easier or more functional, but before you go applying for a small business loan, you’ve got to estimate how many lives you might be making easier or more functional. Come up with a quick customer profile or buyer personal (Pinterest is a really easy way to do this) and try to imagine who your ideal client would be.
To help figure it out, ask yourself a few more questions, like who needs your business, and what are they currently doing without it? What is the important problem that you’re solving? How many people have this problem?
“Ideally,” says Beate, “a lot of people have this problem.” If it’s too niche, how can you broaden the business plan without offering too much, or getting to vague?
Finally, you’ll want to do some planning for the future — including the very real (and very lucrative) reality that your business, if it’s strong enough, could eventually be acquired. So ask yourself one more question:
Question 4: Would someone buy this business?
“We hear about a lot of startup companies being gobbled up for insane amounts of money,” says Beate, who herself sold one of her companies to Bill Gates for a pretty penny.
Looking at your idea as a potential business that might be worth a lot of money is a good way to construct a plan that is not only beneficial and enjoyable for you and your theoretical clients, but also one that’s financially sound and, thus, desirable.
For more hands-on information about how to turn your idea into a real business, check out Beate’s class, Turn Your Talent Into A Business In 12 Steps.