Having An Idea Is Great. But What We Need Is People Who Can Turn Ideas Into Business Institutions
Ideas are a great point A. They are the first draft of any business. A raw reflection of an entrepreneur’s ambition to accomplish a goal. For every billion-dollar idea however, a diligent plan was pursued in order to get it to that point B: an institutionalized business. Indeed, the number of startups does not correlate to a sustainable economy. Ideas without a path to realization can be an important burden to economies suffering from unstable employment rates.
If you happen to be that person with the killer idea, get it up and running by following the 5 main stages it takes to make it a killer business.
Stage 1: Turn your idea into a business concept. Alana Mueller, the president of Kauffman FastTrac in 2012, defines this as “a bridge between an idea and a business plan”. This means clearly, concisely and simply outlining answers to basic questions such as:
What service or product am I selling?
What is the market I am entering?
What makes it unique to this market?
What methods will I use to sell it (marketing and delivery)?
What legal steps should I be taking to institutionalize my business?
Why would customers want to buy it?
Who will buy it?
Who am I competing against?
Who are my potential investors?
Who will run operations and management roles?
How much money will it take to get my idea up and running?
Where do I see my idea in 12 months time?
Essentially, a business concept will allow you to identify gaps, manage potential risks and challenges, as well as focus and detail your idea. Additionally, information delineated in your business concept, will be helpful to acknowledge in your pitch deck to future investors.
Stage 2: Establish a strong legal structure. Register your business with the government. Depending on where you are based, this is both an essential and tedious step. According to the World Bank’s Doing Business Report 2014, the number of procedures and time to start a business have been slightly reduced in countries such as Jordan, who’s ranking between 2013 and 2014 decreased from 112 to 117 out of 189. To date, starting a business in Jordan remains time consuming and expensive for the average Jordanian. Nevertheless, it is ultimately an unavoidable step to selling your services and getting your business institutionalized.
Stage 3: Get a crew. No matter how small your business idea may be, you’re going to need some help. Your instinct may be to hire technological and technical expertise if you’re relying on for example, social media to attract a customer base. Nevertheless, your idea will never mature if it’s path towards a sustainable business is not managed. In the words of Neil Petch, Chairman of Virtugroup, “entrepreneurship is management”. Consider hiring a sales and management expert to get your idea into an environment where it can start competing on the market. Once you’ve shared your idea and plan with a crew, clearly state in legal contracts what is expected from them. This should include information such as the terms of employment and your start up’s policies on for instance, vacations.
Stage 4: Do a trial run. Get some feedback from potential customers. This will reduce negative customer experiences in the future and will most likely improve the product or service as a whole. Note however, that some advice will be bad. Instead of listening to every opinion and taking it as fact, look for patterns in customer responses. Most importantly, ask them questions: How would you like to see our service improve? What where your expectations versus the reality of your experience with our product? Would you recommend this product to a colleague, family member or friend?
Stage 5: Establish Shareholder Agreements. Once you reach the investment stage, these are essentially a set of agreements between members of your crew and/or investors that legally determine your rights as shareholders. Essentially, who manages and runs what in your start up. According to Mathew Faustman, CEO of UpCounsel, agreements can be about the right to transfer shares, right of first refusal, and redemption upon death or disability. Establishing particular roles for each stakeholder in legal terms makes each relationship in your start up transparent, avoiding any hiccups with state laws in the future.
At the end of the day, keeping happy customers is what will give your idea the financial strength to become a sustainable business institution in the long term. Each stage is hence, a little step taken to fill the gap between point A to point B.