You Have a Business Idea. Now What?

Ideas are a dime a dozen with a large percentage including patented never making it to market. In the past I’ve written on the tasks and challenges of a product concept to product execution or reality. Knowing and following through on the required steps from concept to delivery is the key to success. It will require continued and committed research, venture sustainability and funding. Funding or lack of, is typically the difference between “I Would Like To Do This and “How Do I Get Started”.

Product launch is the most difficult part of the business plan and again in most instances never gets to this stage. Harvard Business Review posted an article back in 2011, but still very reliviant today https://hbr.org/2011/04/why-most-product-launches-fail. Important points to read are the “Pre Launch” and “Launch Phase” and some common pitfalls the entrepreneur can experience.

Lack of finances is not the only concern in concept to product sale survivial, here is an industry publication on The 20 Worst Product Failurers from well funded companies, where a new product failed misserably http://saleshq.monster.com/news/articles/2655-the-20-worst-product-failures.

 There are many approaches to raising capital to launch your idea:

• Friends
• Family
• Neighbors
• Facebook
• Banks
• SBA
• Equity Partners (private firms expecting a percentage)
• Angel Investor (think Shark Tank)
• Crowdfunding (think Kickstarter) 

The collateral damage in one of the first three typically occurs after funds pass hands. Most times the transaction is emotionally based and not based on the possibility of success or goal of the creator. Take borrowing from a family member for instances, you ask your rich uncle if he would loan you $5,000 for your brilliant idea with the pitch that no one else is doing it. Six months later the cash is gone, you are far from a launch and guess what, this year the family is going to the rich uncle’s home for Thanksgiving dinner. Do you really want to be the second turkey on the table, be the cause of family havoc or miss future free holiday meal? I think not. 

What could you have done differently before asking your rich uncle for money?

1. Created a business plan
2. Had a timeline
3. Have the results of a focus group
4. Have a manufacturing facility in place
5. Have suppliers and distributors in place
6. Have a marketing strategy and plan
7. Started a social media campaign
8. Treat the individual the same way you would a stranger or loan officer

Besides friends, family, neighbors other resources available are from individuals you do not know such as banks and investors. If your plan is this route, then the to do list is still important, but understand you will need to up your game on pitch, plan and response. When it comes to investors and institutions, vetting information and defending a point are none emotional based, but fact checked, including a background check on you, When you plan on asking for money for your business, you and only you need to be fully prepared for the questions and concerns directed at you. It’s not personal, it’s business.

Coolest Cooler is a great example of the product creator, Ryan Grepper of not planning properly for a first time pitch on Kickstarter. Ryan missed the goal miserably the first time, only to come back 6 months later and prepared resulting in 62,642 backers and a pledge of $13,285,226 to start his business and not making a change to the product.

When considering SBA, banks and investors, the same applies only now the paperwork and time period is greater. In most cases these bodies want to understand who you are, if you are serious, honest and have the capacity to pay back the money plus interest. If an investor wants a portion of your business, in many instances they expect almost half. You may be amenable to this to get the product off the ground, but what if the product becomes as successful as you anticipated? Answer, remain with a 50% partner in decision making and profit split.

So be careful in your plan, approach and where you request money, it’s a lot of work and requiring complete dedication, well before you get to the product stage.

Contact Darryl, he can make your dream into a successful reality.