Maybe it is the money factor which keeps you from going for it, maybe it’s time? These two resources are what we protect the most in the world so I completely understand that the fear of losing one or both of these is daunting. To be completely honest if you are going to take the leap and start something for yourself these elements will have to be sacrificed from time to time. Now a sacrifice is ok if you have planned how the time and money will be spent to be able to reach your goals. What is not ok is wasting these two assets.
So, you may ask yourself, well how do I know when I am wasting compared to sacrificing? That’s an easy one because it is based around your planning and execution of the tasks ahead to achieve the launch of your idea. You need to be pragmatic and leave your emotions at the door at this point as you may come out the other end and realise that your idea is not viable.
The only reason I know this is we personally lost thousands in our first ventures due to incorrect planning and execution… so here is what I have learnt:
- Have a clear vison for what you want to achieve
When you first formulate your idea, it may be a little messy. That’s ok! Until you have it on paper you cannot really see what you have to be honest. By jotting everything down in your head you can start to create a vision of what it actually is you have. Start crafting your idea and working out your route… it will change over time but when you can start seeing the path you are ready for the next step.
- Do your research
I cannot stress enough how important it is to do your own research. The problem is that if someone researches for you or that you take information second-hand you are in danger of Chinese whispers. This is because information can become blurred as it travels down from the source… also people can lean towards one side rather than the other meaning you could potentially adopt their view points.
You need to look at if your idea is viable, how much will it cost? What is the route into the market? How are you going to be different? How are you going to improve on what it out there already? How do you want to be perceived? What are your values? Who is your customer? What do they look like? The more questions you ask yourself, the more you stress test your idea and the fuller it will become.
- Test, test, test and test again
Well well well… you have decided that you want to create it now. This is where we get into the nitty gritty of everything. It is all well and good researching and asking yourself questions but once you create you start getting a real-life view into what it will take to launch.
At this point it is imperative that test your prototype product and/or service on everyone and you look for brutally honest opinions. Family, friends and yes men will not work. They will not help. This is where you need to find problems. You are looking for the negatives. You want to find improvements. You want to test again. You are going to polish that diamond.
- Ask questions – be no biased and curious
So now you have a product or service where you feel it is market viable. It doesn’t need to be perfect at this point but you are getting good feedback and the processes that are in place makes it a viable idea. At this point you really need to ask questions around the actual cost of things. This will start making you think if the idea you have can actually turn a profit but you cannot stop there. For example, you could make £5 profit after all of the work completed but how are you going to sell it? Retail units, wholesalers, ecommerce websites… points of sales take cuts.
So, does your profit margin have enough to feed all of the mouths to be able to get it to market? How much are you actually making when everyone has taken their cut? What about the cost to market your product? What about the minimum order quantities on the packaging you need to get moving? How long will it take for you to actually break even? How many hours will it take to produce the amount you need to break even? Do you need additional help? How are you going to train these people? … Can you see how some of these simple questions may make your idea unviable even with a good profit margin? … not all hope is lost though? Maybe you just need an investor or co-founder, but now you have a product and all of the research to be able to approach someone else but you need one more thing…. Time for the next step.
- Create a solid business plan with your way into the market
Now this is a little bit long I admit however it is so important to take everything you have learnt from step 1 to now and get it on a formalised document. This document will show everything from how the idea started, the vision, how it will work, the starting costs, the route into market, the brand and its values, the roles I the company you personally take, the capital already in the business, the growth route.
This document is live however. It will change and become different as you learn and as the business expands. This will also give you something tangible to present to other people be that friends, family, business associates, your new co-founder, an investor etc. At this point they can give you an insight to what they see and this will make your position stronger… DO NOT GET EMOTIONAL AT THIS POINT. As you have done so much work it will be easy to get very defensive about your idea however you are near to the end so this is the point where you need to scrutinise yourself further. Take on the comments of other people.
- Stress test your financials
Now you have got everything in line it is time to test your financial situation. How much is it going to take to get you going is not enough I am afraid. You need to look at your external bills like your mortgage, your family, your lifestyle… how much does it really take for you to survive and how long can you last without needing a stable income?
See this is a really important point most forget to mention or do. We all get so excited about this brand-new idea we do not take a minute to look at our own current financial situation. You need an element of burn cash so to speak, this is what it takes to get the idea of the ground and keep you going until you can pay yourself from what you have created. My best advice here is to forecast your costs both personally and for the business and then combine them. Once you know this you can adequality plan how you are going to move forwards. Now this may mean you can get the business of the ground but you need to work a 16hr a week part time job at £9 per hour for the next 34 weeks. Can you see how this level of granular detail will greatly help you in the future. Not just for the business but for you general well-being also.
- Do a little more research
Now we have gotten this far we are nearly at the point for going for it. So, take a day and do a little bit more research on your idea. Make a few calls and send a few emails, you never know what you may find armed with the information you have learnt up to this point.
- Take a break and look at your work after a week
We often get consumed in work and get very attached to things that we work hard on. In these states of mind, we can get blind sited to key pieces of information which may be the make or break of us. You are starting something here and it has the potential to be big… this can take a long time to grow and build so just give yourself 7 days to take a real break and then look at what you have a created-on paper after. You never know… maybe the idea develops further and you get stronger after this.
Honestly, by taking a little time out you can save yourself years and thousands of pounds. Even if you only follow a few steps you will be in such a better position to make a strategic move instead of running in blind and firefighting problems.
Remember… If you get to the end and its all good… You’ve got this. Go and kill it.
Listen to my personal experience about starting businesses without the steps above on my podcast episode.