5 Stages of Business Growth: 1st Stage: Idea to Reality: Exploring the Feasibility of an Idea
How many people, if you were given all the money you needed will know what to do with every penny of it to make your business a success. Not last a year or 6 month, a success!
You all have Monday blues? You’re fed up with the norm and have an idea that you are bursting to get on the market?
Before you hand in your notice, before you cash in all your life savings, before you go all gun ho, get a glimpse into what your life as a business owner is like. These articles are designed to give you an idea on whether you are ready and prepared to act on them. Do you have what it takes and more importantly do you know what you are getting yourself in to? Or is it better to start focusing on your career and current company. Some people are not destined to own their own business, but have much more value in growing others businesses.
Is this a life goal?
What is your motivation? - you need to be inspired by something/someone, because it can get lonely and you can get lost.
Do you know what you are getting yourself into?
Are you aware of what is required and the sacrifices you have to make?
Is this an x-factor moment? Has your family & friends told you "you have a great voice", but really sound like a wailing cat?
WHAT STAGE ARE YOU IN?:
Yes you can always start small and scale, but have an idea of what you Mission Objective is? Don’t deter from this and don’t add to it to quickly or radically. Keep focused and don’t think I want to build a new google on the moon. Scaling is not hard, it’s getting to the first step. Once there you can climb a lot easier.
Depending on your focus, being a business person is hard. Not everyone is equipped for it and not everyone can do it, that’s why most if not all of us have worked for others before and will return to it. Sacrificing your life and in some cases your health will be required and most importantly mental strength is needed. You will go through more emotions when starting your business than you will ever in your life. You will have more barriers to make you think you are going to fail, wake up breathless, soaking in sweat and heart beating. All this is actually normal. How you deal with it, will determine your success. Ignore it and fight on and it will help for a short time, but it will eat you up. Surround yourself with the right people to help you through the tough times. How to decide to move on?
Answer the next two questions:
Put down 3 reasons why you are doing this
Put down 3 things you want to achieve
I HAVE AN IDEA:
Where to find research & analysis?
IP Business Library British Library – all the resources companies pay £100k’s a year free, use the hell out of it!
Conduct own market research – look at friends and family, then scope it to asking random people to take part in survey and market analysis, you’ll be surprised how many are willing, takes time and effort, but worth it. British library is a great source for this, people need a break from studying sometimes.
Conduct product testing – before even spending anything on production/manufacturing/programming, test a small teaser. Software testing can be done simply by speaking to an experience professional about an idea and it’s feasibility. Before going crowd funding or angle investing, test the idea on a wizywig app site appypie.com mobincube.com etc. For physical products make it at home, not with a manufacturer, unless legally required. If you can’t build it, don’t expect to sell it or manage it. If you an expert pasta boiler, don’t think you can run a chain of carluccios.
Financial analysis does not mean run to a CFO. If you can’t manage finances and don’t have a head for numbers, get a partner who does. Pay for one of these and you will quickly lose all your money on them. Biggest failure in business start ups is finances, lose control or don’t know it, don’t start a business. You wouldn’t go weekly shopping trip and leave the bill for someone else to pay. I had an experience once with a “mentor” at a “start-up” funding company (not an accelerator) who looked at my Business Plan to assess me for a loan. After 2hrs, I came out flabbergasted. Someone with no financial accreditation was giving me advice on my finances, furthermore, someone who had done no preparation on my business, the industry, the mission, read my proposal, giving me advice on what I should be doing! I cancelled the application and decided on another approach. This was not because of my arrogance or ignorance, but my instincts to identify risk and warning signs. If you need your financials reviewed and approved, pay for an accredited, certified and qualified person, in your chosen field!!
HOW MUCH TIME DO I NEED TO DEDICATE:
Depending on what you dedicate. Time is always against you. Do you have family commitments? Do you have money constraints? Do you have the next google and have no idea on how to proceed?
Get an objective in place and you will need to remind yourself of this every day.
Keep to a plan, set task lists and plan all the way.
Don’t be a superhero. I’m too busy I’ve been sky diving, I’ve done this, I’ve registered for this = busy fool.
Don’t put off the goals. Just like a shopping list, get all you need, then add to the trolley your treats.
Motivation is so important. Are you motivated by money? God? Your family? Pick something to give you strength every time you feel dead and cant go on. This is how athletes endure the biggest strain on their bodies to be the best.
What to plan. Plan enough for you to know what you want to do. This is a detailed check list of tasks that you need to achieve. Then it is used for your day to day running of your life and business. Structure your days and keep focused on the last at hand. Always have one of these.
A young lady, at a recent event, asked me about time management. I replied do you have a business plan, she replied well yes sort of, I have 3. You need 1 business plan and 1 only. From this one plan, you can plan your entire day, week, month and year.
I cannot stress the importance and need for business plan and research. The main reason behind business failure is the failure to prove your concept. I have recently had a client tell me “so would you be able to get a developer for this app idea I have”. He had no business plan, no experience in IT let alone app development, he thought he could create it for £2000-£3000, he had no idea of functionality or architect, he had no idea of competitors, he had no idea of who to target and no idea of sales & marketing strategy. He didn’t even have a name. 1st there is no app development nowadays that will cost anything less than £10,000, that is on the cheap. 2nd that doesn’t even cover the cost of an IT architect. 3rd competitors will destroy you with their greater brand. 4th on this occasion the app did exist, further the similar company had been valued at £50million…..yes great even better right? Wrong, you have just got yourself from a £10k budget to multi £million budget, marketing, branding, advertising, development cost. Plus you have a major established competitor and you are second on the scene.
Having ambition is not a bad thing, but it could lead you into a lot of trouble. Keep focused and use the advise around you. Be careful of the incubator 8-12 week master plan get you in to super sales and have Apple offer to merge with you all for a small cut price fee of £5000. The world is filled with them. There is no such thing.
If you are looking for a quick turn around and have the unlimited funds to do so, then by all means go for specialists and become an investor not an inventor.
Personal attachment is often the pitfall to all businesses. I hate hearing it, you will always hate it, it’s like being told your baby is butt ugly. But you need to take every criticism as feedback. If you get enough people saying it, you are wrong. You cant please everyone, but aim for the large majority.
If you get the “Wow factor” 3 times on 3 separate occasion by non family/friends, you are on to something.
Some times your own vision is enough, but be sure to cover more R&D before proceeding.
Someone recently wanted my help on a project for bespoke packaging design. Spent some time, as it was a friend, planning and going through everything from IT, to business plan (didn’t have one), financials, structure, architecture of how the business worked, suppliers, regulations, laws, taxes, vat import/export, didn’t even know his own P&L or profit margins. It was when I delved deeper into his business that I found serious flaws. I got him 30 potential clients who were all excited and amazed at the offering. One by one they came back with “errrr I have a better price for exactly the same thing with my current supplier”. When I asked to look at how he calculated his profit margin, he said “give me a second I’ll make an excel sheet”. That was the last work I did for him.
I know the price of every product I have my companies. When I say price, I mean I have calculated how much gas and electric is used to make just 1 product, how much ink toner and paper costs for just one product and even though we cook in batches, how much to probably the penny each portion costs. From this I add what profit I want. Logistics, tax, are calculated in the forecasting and P&L.