I Have A Great Business Concept, Now What?

Post by: Ashish Rajadhyaksha

Well it’s a great start for sure!  Most of us think of novel ideas and concepts from time to time that we strongly believe don’t exist in the world and can make us the next Apple or Facebook or Alibaba.com.  What differentiates the dreamers from the do-ers is the vision; tenacity when chips are down; risk appetite; very strong network of family, friends and mentors; willingness and ability to know what you don’t know; wherewithal to withstand financial and personal setbacks; and strong people skills to put a team together; amongst many others.

Someone who is starting a new venture needs to recognize that almost all branches of business management including Accounting, Finance, Marketing, Operations and Sales are highly specialized, and require training and deep expertise in that particular field. What distinguishes the field of entrepreneurship from these other areas is that an entrepreneur needs to wear all of the above hats either personally or through the team.  We don’t need to know a lot about one thing, but a little bit about a lot of things.

As entrepreneurs, we need to know:

  • How to Sell to our customers (individual or institutional); 
  • Market our Business through flyers, blogs, word of mouth, social media;
  • Arrange Initial and Growth Financing;
  • Manage Receivables/Payables on a regular basis;
  • Oversee Payroll, Rent, Motivation of Employees;
  • and Handle other Operational issues and tasks.

As you can see, this isn’t for the faint of hearts, but for all those daredevils who dare to dream and dream to control their destiny!!

Entrepreneurship comes in many forms.  There are Family Businesses, Individual Startups, Partnerships, Social Entrepreneurship, Corporate Intrapreneurship, and Government Enterprises.  What they all have in common is identification and ability to satisfy needs and wants of their customers through effective means of distribution at a fair price.  Even Governments need to provide services to its citizens at a fair price through efficient distribution mechanisms; otherwise it leads to large deficits if revenues don’t match expenses, and inflation and devaluation of currency if the government simply keeps on printing money.  For the rest of us without that ultimate authority to print money, it means reduced equity or ultimately bankruptcy of the business we started with our money, blood, sweat and tears.

Especially during these times of corporate downsizing, layoffs, rightsizing or whatever the popular jargon is of the time, there’s tremendous interest and rush to thoughts of entrepreneurship.  While it is natural for people who are under tremendous stress of feeding their families, making their mortgage payments, and worrying about their healthcare to figure out if by starting their own business they would be able to manage their affairs more effectively, they also need to consider if starting or joining a startup fits their personality profile.

Below is a general, simple Business Concept Template that anyone who’s thinking of starting a business would be wise to fill out.  This template helps crystallize thoughts, and creates a foundation for writing a formal business plan that an entrepreneur would later need to get any meaningful funding from family & friends, banks, VC’s or anyone else who is interested in the concept.  So here it goes:

{Your Company Name}

 

Name of the Team Leader:                                   _________________________________

*  Position at the Company:                         _________________________________

*  Email Address:                                           _________________________________

1.      DESCRIPTION OF THE BUSINESS CONCEPT:  Describe in one or two sentences your product or service.

2.      MARKET DRIVERS:   Briefly describe the problems that currently exist that will make your business attractive or successful right now v/s the competitors.

3.      TARGET MARKET:  Who are your customers? Are there any special characteristics of the target market? What’s the size and scope of the general demographics? Need to remember here that our target market isn’t the whole world.

4.      VALUE PROPOSITION TO THE CLIENT:  Why would they buy this product/service as opposed to some other product?

5.      DISTRIBUTION MODEL:  How will this be sold? Who will do it?

6.      REVENUE MODEL:  How will the business get paid?  Is it online, store or other means?

7.      PROFIT POTENTIAL:  What’re the estimated revenues and expenses? How long to profitability?  These should be projected monthly for the 1st year, then quarterly for years 2-3.  While these numbers will almost certainly vary from actual results, what’s important are the basic business assumptions that go behind the projections. 

8.      MANAGEMENT:  List of current team members with their role or function.  Also key outside Mentors, Advisers and Professionals such as Accountants, Architects, Attorneys, Bankers, etc depending on the business.

This article is the first in a 3 part series, atEntreprenuership Central, on “How to Launch Your Own Business?

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