Submitted by Collette Royal
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How To Create A Good Business Idea?
The two key ingredients of a successful business are a reasonable business idea and a thorough business plan, which will put the meat on the bones and turn your idea into something concrete and viable.
A wonderful idea is a great start for anyone wanting to start up a company, but it’s just the bare bones and needs to be fleshed out with a detailed and thorough business plan before you start the ball in motion to get the business off the ground. For a start, you’ll need a business plan to make your sales pitch to potential lenders and investors, but you’ll also need it to help you examine the idea in more detail to ascertain whether it will be viable. You need to understand the market and whether people will want to use your service or buy your product. This means doing some market research.
Here are some helpful pointers to assist in your analysis:
- Your product or service should have a unique quality that makes it stand out above others.
- It has to be something that people want – i.e. there needs to be a demand for it.
- Your product or service is most likely to be successful if it plugs a gap in the existing market or if it is vastly better than anything else currently on the market.
- Build a profile of your potential customers. Understand who they are and what their needs are.
- Think about how you will promote your business and establish and maintain a customer base.
- Investigate your potential competitors. Think about their product or service, how it is marketed, what its unique selling points are, how they run their business.
- Compare your business to those of your competitors. Consider how you can make yours better or how you can set it apart from the others.
- Do some research into the industry. Look at previous history and development, and any significant success stories or failures.
- Find out whether there are any laws or restrictions governing the field in which you want to operate and examine how they could affect your business.
Often you can gain a better understanding of something by consulting other people. As the old saying goes, two minds are better than one. Focus groups and brainstorming sessions are frequently used by market research agencies and marketing departments of large companies. It can help to gain several different viewpoints and other people may come up with ideas or problems that you would never think of. Hold group sessions, ask people you know for their opinion, or, if you can afford it, contact a market research agency to help you out.
You’ll also find a great deal of useful information on the web. Companies often have reports and news items on their websites, and sometimes a company history section which can also be useful. News websites are also a good source of information, where you can search the database of old news items.
This analysis will help you to understand the purpose and direction you want for your company. One of the most important elements in a successful business is having a very clear understanding of the company’s vision, i.e. its ultimate objective. Your customers will only understand your business if you do.
As well as establishing whether your company makes good business sense, you’ll also need to ensure that your product or service actually works. A prototype will therefore need to be made and it will need to be tested. This will inevitably cost money. There’s a guide to finding finance for your business in a later article in this series.
Of course, you don’t need to have a fantastically creative idea to set up a company. In fact sometimes it can be much more difficult to establish a company that’s based on a new concept, as there is no previous experience to go by. So setting up in well known territory can provide a great deal more reassurance. However, your company won’t succeed just by being the same as everything that’s gone before it – you still need to find a unique angle to assert the identity of your company and make it better than the rest. Does your product or service have better features or facilities? Is it manufactured to a higher standard? Does it last longer? Is it more reliable? Are you quicker at delivering? Do you provide more flexibility? Don’t rely on price alone for your business model. People don’t always make choices based on what’s cheapest – perceived value for money is usually more important.
If you prefer the security of starting up in an established field, you might want to take this one step further and set up a franchise business or take over a company that’s already up and running. This can provide you with more security and peace of mind, although it does have its pitfalls. In a franchise business, you will be bound by the rules and regulations of the parent company and may not have complete control. You also may not have as great a capacity for making profit. If you’re thinking of buying out a company, you’ll need to do your homework to ensure that it’s a secure proposition. Find out how the business works, who its customers are, why it’s being sold and its history.