Today, we’re kicking off the newest series on the blog – Business Basics: How to Start a Business with Authenticity and Intention. This six part series will take you through coming up with a new business idea, naming and legally forming your business, setting up your financial structure, branding your new business and building your first website. First up: The Idea.
All you need to start your new business is an idea. It’s an answer to this question:
What are you willing and able to produce that other people are willing and able to pay for?
A word on business plans
Look. Businesses plans are great. But waiting to make things happen until you can plan them perfectly in an eloquently written document is not great for two reasons: (1) you’ll likely never start and (2) once you start, you’ll realize your business is going to evolve in ways you never imagined. As far as I’m concerned, a business plan is only required for getting a loan at the bank or impressing your mother in law. Since 60% of all businesses require less than $5,000 to start, and I really can’t help you with your mother in law, we’re going to throw caution to the wind and proceed without one.
If you have an idea already…
Skip down to “Finally, the Test”.
If you don’t have an idea…
Time to start brainstorming. There are two main ways to make money: providing services and selling products. Both are great, and the line between the two is becoming more and more indistinguishable (think information products and “saas” - software as a service). Pour yourself a glass of wine (or coffee, if it’s before 11am) and proceed.
Make three lists: your skills, your strengths and your interests. It’s all about you right now, so take a shot of tequila and start unabashedly bragging on yourself.
Here are some examples.
Skills: dog walking, ballet dancing, knitting, organic farming, ruby on rails
Strengths: being friendly to irritating people, staying organized, teaching new ideas to others, balancing seventeen projects and an angry boss
Interests: college football, digital photography, fishing, medieval history
If you don’t have ten things on each list then you’re not trying hard enough.
Then, the customer.
Take a look at the long lists you just created. Which of those things translate to products or services people would actually be willing to pay for? It’s likely that no one’s going to be interested hiring you to perform an original ballet inspired by medieval history to their dog, but you can bet your bottom dollar someone is going to be ready to shell out the big bucks for you to stay patient while teaching fly-fish casting to complete beginners. (Well, I think so. I actually have no idea about anything to do with fishing. But you get the idea.)
Still stumped? Listen to episode 238 of the Internet Business Mastery Podcast for more ideas.
Finally, the Test:
Once you have an idea that sounds good to you, it’s time to find out if it’s actually something people are willing and able to pay for. Otherwise it’s a hobby.
There are a few ways to test this. Is there anyone else doing what you want to do? Don’t fear the competition – the existence of competitors means the space you’re interested in is probably profitable, and that’s a good thing. (Need more convincing? The Craigslist Penis Effect should take care of that.) If no one else is doing this, are people looking for this product or service? Check places like Craigslist, job boards, oDesk and good old fashioned Google.
If all signs point to yes, then it’s time to pass the ultimate idea milestone: find three people that are interested in paying you for your idea. Take them out for tapas. Find out why they want your product or service. Ask them what’s wrong with what’s currently available on the market – and how you can fix it. What do they think a good price is for your service or product? Use the answers they give you to determine your initial offerings and pricing structure as a business.
You should finish this section with a solid idea of the products and/or services you are going to offer, who you’re going to offer it to and how much you’re going to charge.
We can't wait to hear - what are some of your new business ideas? Share them in the comments!