How to start a Business

March 31, 2012 | By More

The most exciting part of starting your own business is when you feel you have a great idea that, of course, will sell – and you are sure they will sell like hotcakes! But then how to get started?

That was the subject of our recent workshop.

Workshop on business plan writing

The standard response is to immediately go out and raise money and get started – as the “Just Do It” school of thought will suggest. People with money (as are investors or merely supportive parents and relatives) will reasonably want to ask what it is for, how you are going to make money, how you will get your idea designed, to suggest a few questions before they hand over the money.

So let’s rewind the process back to the point when we ask “how to get started” and be better prepared. There are some key areas where it will be good to have answers to, even if you have no need to ask for other people’s money. These questions are of the type: what, who, why, how and how much. Let’s briefly go over them.

What is the product?
So the idea was an inspiration out of the blue, and you feel very comfortable this is it – finally. Still, when you have to build and create it into a product, you still need to provide more details than just a sketch. Even developers and designers need some framework and basis. Take some time to articulate what it is in more detail. Make sure you have covered the key details. There are many ways to do this. [Click here to read about some ways to look at a few existing products.]

Who is the product for?
One key aspect in filling out details of the product is to identify who needs it in as much detail as you can. Just saying ‘everyone’ needs it will not help you narrow options when deciding what features of the product you need. There were many MP3 players in the market prior to Apple’s introduction of their iPod – but their design for only Mac users eventually took over all music players.

Knowing who is your target user (and market) also helps you understand the type of distribution and marketing strategy you need to work on. [Click here to read more about the importance of understanding your customer.]

A mindmap of what to consider when starting your own business

Why will they buy it?
This is an often overlooked question because it may be too obvious to the inventor. A useful perspective is to look from the user’s point of view: “Why should I buy this one when I have other ways of accomplishing the need?” Perhaps the user today is not doing anything about this problem and spending money on your product does not make sense. So how would you convince them that they do want that ‘lava lamp’ in their living room?

The lava lamp makes a comeback. It was previously a hit in the 1960's and early 70's.

As a result of this question, perhaps you can identify unique features that your product will need to have to increase its attractiveness. [Click here to read more about how you can make a product that can be bought.]

How will the product be developed?
There is a great temptation to jump straight into design, development and how to get the product made. As we discussed in the previous paragraphs, key areas may be missed out if we do not think of ‘who’ and ‘why’ in more detail. Changing the design after the product is completed will add significant cost – and causes delays which translates into more expense.

Plan and scope out the project before starting out. Make sure you identify the right resources to complete the product. The process you use must be appropriate for your business. “Just doing it” also implies getting early and quick feedback, and then fast redesigning. Managing your teams well, including marketing, is key to getting your product completed on time.

How much to charge?
A product need to be priced right: either as much as the market can bear; or in relation to alternative solutions. In either of the cases, sufficient profit needs to be generated to sustain the company. Over 9 times out of 10, a startup closes down because they ran out of cash!

Plan well and don’t be one of them.

The author with budding entrepreneurs

Parting Remarks
These pointers are not meant to prevent you from “just doing it” – they are meant to be reminders to add to your thinking as you go forth and “Just Do It”.

What you do and how you manage your team are among other elements of entrepreneurship are also needed to be successful. This is written elsewhere on this site. [Read more about “Qualities of an Entrepreneurs” here].

If you put all this together into a document, then effectively this document can be considered your “Business Plan”. [Click here to read more about “How to write a Business Plan”.]

Find out also about how to know “When your business is Viable“.

All the best.

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Category: Managing your business, What's Next?

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About the Author ()

EngTong, pioneer and innovator. Graduated from Imperial College London with an MBA from Cranfield School of Management. Lived in Scotland, England, California, Beijing and led teams in Italy, France, Japan, Taiwan and Malaysia to do the impossible. Now based in Singapore and believes the future is to blend the sophistication of western management practices with the strength of Asian Values. Trained as a Chartered Engineer. Member of IET, Associate of City and Guilds and a certified SixSigma Champion.

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