How to select a business idea?
Identifying a successful business idea for a start-up venture may require budding entrepreneurs
to harness their creative energies, leverage their hands-on experiences/skills and turn their passion intoa profession. Here’s how you can do it…
Entrepreneurship
Call it an after-effect of the ‘Make in India’ and ‘Start-up India’ campaigns or the rise of a new breed of app-based techpreneur teens who have easy access to digital online tools, entrepreneurship seems to have caught the fancy of many-a-school and college going youth. Setting breaks on the post- colonial euphoria of chasing government and high-profile corporate jobs, youth look to be at home discussing entrepreneurial issues, market dynamics, business opportunities and the challenges accompanying it.
So also, B-schools and engineering colleges across the country are witnessing rising incidents of
students opting out of the placement routines, at times even turning down hi-profile/high-paying job offers, only to pursue their deep inner entrepreneurial calling. In schools and colleges, ‘entrepreneurship’ is the new buzzword!
Business Plan
Now for all those youngsters who have already decided to be an entrepreneur and are guessing as to
what goes on to make businesses successful, whether it’s a right product, a smart business plan,
adequate finances, a team of sharp and committed staff, world-wide digital footprints…, don’t be
surprised if you ever hear management gurus emphasis on selection of a ‘right business idea’. It may set the alarm bells ringing for most people who are seriously considering to start a business based on one of the two personal biases:
-It’s a business I am already aware of: “I love food and know all about it, so I should start a
restaurant,” if you feel so, better think again. Just because you are a foodie or a good chef doesn’t
necessarily mean that you would successfully run a restaurant. Choosing to do so, could be a huge
mistake!
-It’s a product/service I am in love with: Again, just because you like the product or services,
doesn’t necessarily make it profitable. Especially, first-time entrepreneurs ought to be conscious of
the fact that running a business is a tough ask, and that things could become all the more difficult if
one gets passionately attached with the product/service.
Steps to Entrepreneurship
So how does one really go about selecting a business idea that in the long-run would not only be
profitable, but also yield rich dividends on scaling it up? Here’s a step-by-step approach to do so:
- Picking up an idea: Look for something business that fits your passion, life goals, personal
strengths, real-life experiences… While you do so, look at it as a possible business idea, and don’t
fall in love with it just yet.
- Think 3600 : Evaluate the business idea as an investor would otherwise do. How big is the
opportunity? Is the timing right? What will it take to execute it? Do you have adequate finances?
What are the risks involved? Is the product/service marketable? How long would it take to make the
venture profitable?
- Get Feedback: Always be conscious of the fact that the selected business idea is your baby, and
it’s your gut feeling that it will work fine. Playing it safe, look for people who know the market, who
understands the business model, competition, market dynamics… and try getting first-hand
feedback on your business idea. Also try talking to some of the probable customers as to: whether
they would buy it? If so, at what cost? What value additions they would like? How much would they
be ready to pay for it? and so on.
- Business Plan: You should have a well thought out ‘Business Plan’ in hand prior to launch of the
business. Try incorporating all your recent learnings, opinions of business experts, feedback of
probable customers, learnings from market research, financial plan, marketing tools and their
usage… Importantly, the business plan ought to be implementable, and it should have clearly set
goals and target month-wise and year-wise.
- Develop a prototype: its high-time you have a market-ready product/service in place. Thereafter,
consider a soft launch or pilot run of the product/service to plan to launch, just prior to the final
business launch. Keep the ultimate vision and business goals in mind, and look out for feelers
during the trial runs as to how you can achieve it.
- Test the waters: During this phase try to engage with your future customers and suppliers to figure
out how to match your offerings with customer needs. To do that, test elements like pricing,
branding, product/service features, customer experience, marketing strategy, etc. Measure the
results and draw conclusions.
- Make necessary adjustments: Once you have gathered wealth of information on your
product/service, market challenges, customers, competition, etc., try figuring out as to what things
you got wrong and promptly fix them. The process may warrant making small or significant changes
to your proposed product/service or business plan, ensure that necessary corrective steps are
taken to prevent any future eventualities.
Having undergone the above mentioned process, you can be rest assured that your
selected business idea is ready for a formal market launch.
-Noel Fernandes
Team, ScienceNow
