There aren’t many among us who haven’t been struck by an idea and thought it could make a business. You might have spotted a gap in the market or a concept that strikes you as unique.
However, for most people, that’s where the dream ends. The ambition to forge this concept into a burgeoning business too often wilts away once the questions surrounding practically making it happen start to arise.
This is usually because a lot of people don’t have the entrepreneurial skills that allow them to overcome these initial hurdles. However, it’s important to understand that entrepreneurship isn’t some magical gift that people are born with, it is achievable with some focus and dedication.
Whether you recently considered this path following the COVID-19 lockdown, or you’ve had a business concept percolating at the back of your mind for years, some strategies can set you on the road to becoming an entrepreneur.
And today, we’re going to take the opportunity to examine a few of the basic tools you need to turn your idea into a business.
A Solid Plan
The first and most important tool you need is a comprehensive business plan. This will formally set out exactly what your ideas are, alongside details that will outline its potential as an enterprise and projections for its growth.
This is important not just because it can help others — such as loan providers and potential investors — to understand what your proposed company does. It can also provide you with a practical step-by-step roadmap that you can use to guide you through those early days of taking your concept to fruition.
If you don’t have any experience, creating a business plan can be overwhelming. However, while it’s an important document, it’s not as difficult as it sounds. Most take a standardized format and you can use templates to help make certain that you’ve covered all the areas that you need to.
But do take this seriously, as a solid plan can help your company grow faster and survive beyond the startup phase. Elements such as your executive business summary will solidify exactly what your business concept is. While your market analysis can help you understand where your idea fits in the industry and why it can compete in the sector.
While the analysis and market research aspects can take a little more time and focus, you don’t need to make the document needlessly complex. Go for a plan that is clear and simple, but doesn’t leave out important details.
Don’t use any difficult language — whoever is reading it, including you, should be able to easily see exactly what the next steps are. If possible, present your first draft to a friend or colleague, and have them provide you with honest feedback, and gauge their comprehension and enthusiasm for the endeavor.
While it’s true you can start certain types of companies with no capital, gaining funding is usually an essential tool in turning your idea into a functional business.
But it’s also the area that many burgeoning entrepreneurs trip upon. This is often from a perspective of not being fully aware of capital sources or putting yourself into the best position to receive it. Some sources to consider here can include:
Unlike venture capitalists — which are companies that provide investment — angels are individuals who take a personal interest in the development of your company. This can be a particularly useful route when you are passionate about your idea but don’t have a lot of experience.
However, if you have a poor credit score, this can reflect badly on your ability to manage an angel’s potential financial contributions. As such, before arranging meetings it’s wise to work on raising your credit score and keep it in check.
Put in place strategies to pay down any existing debt, and work with lenders to make arrangements that minimize damage to your rating. With a plan in place, you can make a difference within a year, and even if you still have some debt, investors can see that you’re practical about managing it.
Loans and Grants
A bank loan is usually what new entrepreneurs associate with funding. However, it’s important to understand that there are various types available.
Alongside the traditional business loans, there are also Small Business Administration (SBA) supported loans that tend to have lower interest rates and are designed to help get startups off the ground.
If you’re working in non-profit sectors or operating for the benefit of underserved and marginalized communities, there are usually grants available that can help to raise initial capital. Some of these will be Federally funded, others at the state level, but you should also bear in mind that there is usually a significant amount of paperwork involved in the application process.
One of the often-overlooked aspects of turning an idea into a business is a set of values. The underlying ethics of your business not only help to ensure you’re having a positive influence on the world and the people you work with, but it is also increasingly a priority for consumers.
Particularly in Millennials and Gen-Z customers, what a company stands for can influence purchasing decisions.
But having values is also an important tool for guidance. Taking time to write your mission statement helps to succinctly outline what drives your business, and explicitly states the reason for its existence.
This short, simple summary can then be used to influence employees’ actions daily, shape the direction of your brand building, and keep you as a leader grounded to your goals. Don’t think of it as a static element either. Your values, the world around you, and your priorities will change, and you should keep reviewing your values to ensure that they are serving you effectively.
Transforming your great idea into a business can be an overwhelming prospect, but it’s important not to be discouraged.
Your best tools in creating your enterprise are largely those that can help you get moving — a clear business plan, solid capital, and a strong set of guiding principles. With some focus on these areas and a passion for your ideas, you can achieve your entrepreneurial ambitions.
This article is written and contributed by Dan Matthews.
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