Richard McGirr — August 30, 2019 — August 30, 2019
A successful entrepreneurial career is built on energy, drive, and creativity, but these excellent qualities will only take a business so far.
When you want your new venture to be a success, you need to evaluate it in hard-headed business terms before you devote precious resources to taking it forward.
Before starting, consider these eight business practicalities to help you decide whether your idea has real possibilities or is just a pipe dream.
1) Does Your Idea Enthuse You?
Your ultimate entrepreneurial aim may be to make money, but this isn’t likely to be enough of a motivation on its own.
When you’re going to put the hours to make a venture a success, you need to have enthusiasm and passion for the core operations of the business.
- Does your idea inspire you?
- Is your mind full of the possibilities it offers?
- Will pursuing it seem a thrill rather than simple hard work?
Enthusiasm by itself isn’t enough for success, but it’s an essential foundation that’s hard to replace.
2) The Simpler the Better
Today’s hyper-successful businesses may look like complex operations with all bases fully covered, but the best big ideas have simple beginnings.
When your venture requires too many strands to come together before it succeeds, there are too many points of failure to overcome.
Your idea needs to be simple enough to have achievable early aims. Diversification and expansion into dominating your niche can come later.
3) Early Revenue
Similarly, can your venture start generating revenue early in its life?
Even when it doesn’t bring huge profits, it needs to keep its finances ticking over.
There are very few entrepreneurs who can rely on angel investor funds for years without worrying about cash flow.
When I bootstrapped my company, Visichain, early revenue came from small application and development projects. It took some time to find our niche, which we discovered is supply chain and procurement.
We now service some of the world’s top 10 retailers, working on the digital transformation of their procurement processes.
Visichain never would have become the company we are today without having early revenue that allowed us to keep our doors open: We now have multi-million dollar contracts and never took any outside money.
With early revenue, you can survive to find your traction points and product market fit without wasting time, effort and energy running around trying to raise money.
4) Is There a Market?
Your idea may seem like a winner to you, but is it something that customers will flock to?
Is there already a market which you can tap into by offering something unique, or is your product so revolutionary that it can carve its own niche?
It’s essential before progressing to carry out basic market research.
You could pour time, energy, and money into a project only to find not enough people are interested in the results, no matter how refined your execution.
5) Defensibility
There’s little point in building up a venture only to see another business swoop in and corner your market.
- What is it about your idea that makes it defensible?
- What do you offer that’s hard to replicate?
If you have nothing unique, you’ll always be vulnerable.
6) Flexibility
And if things don’t go exactly to plan, what scope do you have for shifting your business emphasis?
While you needn’t plan for a complete change of direction, a good idea will leave you at least a little room for maneuver.
7) Outsourcing and Delegation
Will your venture be completely reliant on your own efforts and talents?
If so, you’re not setting up a business but taking on a lifetime job.
A good entrepreneurial idea will let you outsource and delegate much of the work, leaving you to see the bigger picture and guide the overall direction.
Even if you need to wear many hats in the early days, if the company will never survive without your day-to-day micromanagement then it’s likely doomed to fail, as Christina Comben highlighted in another article, here on Business 2 Community, micromanagement can kill your business.
8) Growth Prospects
And finally, how large could your venture conceivably grow?
Will it forever be a small-scale project that eats time without making a fortune, or does it have the chance of achieving your ultimate entrepreneurial dreams?
There’s nothing wrong with a small but successful business when you love running it; but it’s best to have realistic expectations before devoting too many resources to a project.
And if you want to give it the best chances of success, make sure you’ve fully considered all these issues so that your plan is build on solid bedrock.
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