We often see people with innovative business ideas but almost 80% don’t have plans how to turn it in a successful startup or business. They don’t have any solid plans and lack of proper planning or guidance they get failed to establish a full fledged business. Today we will try to explain what should be the first step (of course some research and planning) every entrepreneur should follow to turn the business idea into reality. We can bet if these steps are well taken care of, then the outcome will be certainly give you a clear idea where your business will be in next few years and what you will require to get there.
1. What do you want to do?
All great products tend to solve a specific need point for their target users or locality. Experienced entrepreneurs are good at identifying such user need, but the need must be acute enough to justify people putting in the amount of effort to use your product. The formula is: high user need + medium user effort = potential success. Point is, most people won’t bother putting in the slightest effort. They just live with most of their pains and especially the small ones. Example of products that sit well above the pain/effort curve: Careem/Uber, myonlineca, paytm, bookmyshow, etc.
2. How big your market is?
This is the most important important thing to be consider before startup which frequently overlooked by many entrepreneurs. If you have never identify the real need of your product or service among the people, how could your business survive? Even costly campaigning can not save your startup if no potential market of customers are there. If you don’t have experience or knowledge about your market, you can keep your eyes on some competitors business or you can even do some research to identify the actual needs of your business products or services. Some survey suggests if a startup can obtain more than 50% of market share, the chances of its success are far more.
3. Who are your competitors and how ahead are they?
Avoid hearing people who says ‘so and so company is offering same products’ and similar stupid things. Market is open for all. If you make offer good products or services the customers will surely come to you.
4. How will you market your products or services?
If you’re a first mover and you’re solving a problem above the pain/effort curve, you’re lucky. Consumers will be receptive to your message and value proposition. If you’re a second mover in an early market, focus on building a good enough product for retention, and on executing on your marketing. If you’re a second mover in a market where there’s a dominant player, your product has to be orders of magnitude better than the first mover to get any user traction. As a web product, your main marketing channels might be advertisement campaigning and social media campaigning.
Web as well as social media presence are important factor that can help in boosting marketing. You also need to know that your online reputation also impacts a lot on the performance of your business. To know the potentials of having online presence you can read this article – Does your business have an online presence?
5. How much funds you will require and when?
You would need funding for several reasons. The first is to pay your startup’s monthly bills so you can continue to grow. The second is to pay your personal monthly bills. The third is to compete on winning markets. The first and second reasons require much less funding than competing to win markets. As a founder, remember that you want to be capital efficient and stay bootstrapped for as long as you can, but if competing and winning means giving up equity to outside investors, go for it. It’s always better to own 50% of a $50 million business, than 100% of $5 million.
At initial stages do not expect 100% returns. Returns and profits always grow gradually. You should also limit your expenses and introduce regular practice of using some expense tracker app to track your expenses.