How to turn an idea into a business
Part of what I love about my line of work is meeting creative and like minded people. I meet people with great ideas every day, most new ideas die on the vine because people don’t know how to take a concept they’ve created and making it real. I love working with Startups because most of the time they are hoping to bring something innovative and new to market. A startup’s potential is limitless, they are charting new territory and that brings challenges. I get asked often what will it take to make someone’s ideas a tangible thing that they can build a business around. My answer is based on the answers from these two questions I have for the Entrepreneur:
Is it the right time in the time for the idea? What need or problem does it solve?
How will it be executed? The delivery of that idea is the difference between a dream someone once had and a business.
Not every idea is reinventing the wheel, sometimes it’s just a revamp of an existing product and making it better, in which case the answers to these questions would be very different than someone creating something that’s never existed. But what every Startup face are a unique set of issues on top of the typical problems that plague any business.
These objections are something I like to call the “Buts” of Startups:
“But, I can’t figure out where to start.”
“But, I don’t know how to make it or find the people who do.”
“But, I don’t have the funding or resources.”
These set of issues usually are objections they must deal with because their idea is untested and they have no idea how to navigate the landscape of product and business creation.. Most of the time these objections are internal and it’s really up to the potential business owner to determine how much or how little they are willing to put into quieting these objections.
The Big “Buts” of a Startup
“But, I can’t figure out where to start.”
This is probably the single most asked question from my potential clients. My advice for Entrepreneurs are these five things to consider if they want to know where to start.
Is the demand there? You need to determine if your idea solves a problem or a need. Sometimes the timing is off, which means you can have a great idea but if it’s not the right time, the other pieces of the puzzle won’t fall into place. No amount of money can fix a lack of demand.
Streamline your execution by doing as much of the legwork upfront.
Get technical drawings for your design with specs and requirements clearly outlined. If the item you’re creating is governed by rules and regulations, research those and make sure you are in compliance. For example, if you are creating something that is being used by all types of consumers, does it need any warnings, does it have any choke hazards, does it need a weight capacity, etc.
Make prototypes and samples of your work and take them to where the buyers are. Test out the market to see if there is a need and if your product gains traction. It’s hard for the average end user to visualize a concept, it’s much easier for them to give you a true impression of your idea if they have something they can see and touch. It might be social media, trade shows/conferences, or through other networks that you are involved with. See what the level of interest is from your target market. If the interest is there, you might be able to hold a successful fundraising campaign.
Ask for help. Utilize resources that you have/or know. I have people reaching out just for advice or to pick my brain for ideas all the time. If you know someone or they know someone that can help, tap into that. You don’t know what you don’t know. Learn as much as you can about the business you are trying to get into from people who know it and have skills within that segment. Set yourself up for a successful execution with the right team members in the right places. If you can’t hire or outsource the expertise in the beginning, since funding might be tight, learn as much as you can and utilize the knowledge of others who know the process. Don’t let pride or fear hold you back from reaching out for help when it’s readily available, and best of all, free.
Sometimes you must start small even if your end goal is world domination. Instead of ordering 1000 pieces from the start, maybe you make 25 and sell those. Use these small batches to raise some funding. But be careful, most small businesses use 40-65% of their sales revenue to buy more inventory to gain sales. This leaves very little room for profit and for raising funds to move forward. The cost of small batch manufacturing and the need to save for mass production later needs to be a major consideration when you are pricing your items. The key here is to gain buy-in and traction with the consumers and your target audience with the inventory you do have.
You can look for funding by joining innovation conferences and tradeshows within that industry—many buyers for large corporations attend these shows to scope out what’s new and meet their customers’ wants and needs. They might be able to fund your business if your idea checks all their boxes. Usually to check those boxes means having an idea at the right time, be able to show how you plan to execute that idea, and having traction from end users.
“But, I don’t know how to make it or find the people who do.”
Expanding on #3 from above, it’s important to ask for help. Use your network, your network’s network, and so on. As a Startup owner the successes and failures of your business is in your hands. Know your weaknesses and strengths, for example if you have no aptitude for math, you would most likely turn to an accountant or a Financial Officer for their expertise. Another example, someone not familiar with manufacturing might not know that they don’t need metal to achieve the chrome look on an item, that it can be done with electroplating plastic. Or that electroplating only adheres to ABS plastic and not to others. Instead of calling for expensive heat transfer for logos, it’s possible to cut down on cost with silk screen printing. Or that there is a difference between steel molds made from one steel compared to another. Most people don’t know the difference in blow molding and injection molding, or what fabric weave is which. Truthfully, that’s not knowledge most people need in their lives. However, it’s during this time where having someone who has manufacturing expertise can minimize costs while still delivering you a quality product. Find the people who have the kind of knowledge that strengthens your weakest links. If you can, hire those experts so that you can focus on being the Visionary that your business needs. If you cannot bring it inhouse, outsource it, or tap into the resources that are free or offered at a lower cost that you can afford. I often offer consultations at no charge because there is no harm in sharing the wealth of knowledge that I’ve amassed in the last fifteen years. Many others would readily agree.
“But, I don’t have the funding or resources.”
One of the largest “buts” is the issue that startups lack the funding to get the help they desperately need. Startup funding usually comes from five sources: crowdsourcing, angel funding, debt funding, venture capitalist, and bootstrap funding. While doing the best with what you have works, it’s often not a permanent fix. Over time, band-aids (short-term solutions) are ineffective in creating long term change and will end up costing you more over time. Building a solid foundation from the get-go will save you time and money because you will do it right the first time. One thing that many successful entrepreneurs will tell you is that funding isn’t the most crucial item, if there is a demand for it, the funding will come. Instead of looking at funding as the largest hurdle, those who want to start a business should be asking themselves if the timing is right and how can they execute it as flawlessly as possible. The ability to sell your business to investors with data to show the demand and how you plan to deliver on your promises will gain you funding. Investors want to see that there is traction and a solid plan for execution. Money isn’t everything, even if it feels like it is. Some Startups have an incredible amount of funding before launch, but money cannot fix poor execution and lack of demand.
One of the things I love the most about what I do is seeing the items I’ve helped create out in the real world. The possibilities are endless since a new business has boundless amounts of potential. The sky’s the limit. Working with startups gives me the opportunity to take innovations from a concept to an item on the shelf. It’s exciting to be a part of that world. Successful startups leave no stone unturned and capitalize on every opportunity to excel and learn. It’s not an easy road, it’s going to be pot-marked by rejection. Take the no’s and learn from them. Find out why it’s a no and work to make it into a yes. Not every startup is going to be able to get off the ground, that’s the reality. No matter how great an idea is, it might not be a business. Most will deal with financial issues at one point or another in their first few years of existence. However, it’s been proven time and time again that the funding will come if your timing and execution is right. If you spend wisely from the beginning and place the right people in the right positions that can help you overcome most of the “Buts” you might face, you’re already starting off on the right foot.
Ask for help and get help where you can. The worst that can happen is they say no. Don’t be afraid of the No’s. Don’t be afraid of failure, failure is at least an attempt at trying. Being a business owner, CEO, or Founder etc. means you should be the visionary of your business. It is okay if the financial side, contract negotiations, marketing/sales, or production isn’t in your wheelhouse. As the Visionary of your business it is up to you to find the people that do have that expertise so you can ensure your business not only survives but thrives. There is no shame in not taking the help if it’s out there for the taking. Even the leanest business can gain traction if they are executing each idea and goal well. Small steps forward are still steps in the right direction. Outsource your weaknesses so that you can grow in your strengths.
Procuredly can help you do just this.