Startups are typically the result of a solved problem or an unmet need fulfilled. If you’re interested in becoming an entrepreneur or starting a new venture, you need to pay close attention to a few simple but important steps in order to get started on the right foot.
People always say that the idea is the hardest part. I could not vehemently disagree more. Anyone that has ever started a business knows that the execution of the idea is far more challenging than the idea itself. But if you want to start a new venture, an idea is important. So let’s start there.
1. Open Your Eyes
We are confronted daily with issues that are in dire need of solving. It’s these solutions that present themselves as potential business models.
At BottleCamo we identified a problem: the distaste for steaming hot beer while doing nearly anything outdoors. We then created a simple solution: place the bottle within a neoprene sleeve inside a 2-piece stainless steel water bottle.
Set a mental alarm in your brain that “goes off” every time you find yourself thinking, “I hate it when that happens.” When the alarm sounds, make a concerted effort to stop and recognize the opportunity slapping you in the face. Then develop solutions.
2. Research Your Solution
You can spend a lot of time developing a new idea, only to find that it already exists. Your time is valuable, so don’t waste it. Spend 30 minutes on Google going through the first five pages of results before taking any big steps towards developing a new business model.
Also, go to google.com/patents and do a basic preliminary search to determine if your idea has already been patented. If it doesn’t immediately appear in the search results, you’ll still want to have an Intellectual Property (IP) Attorney do a patentability search later down the line.
3. Discover The Need
You think your new product is incredible, right? Well, the masses may disagree. You must determine that there is truly a need for your product or service that extends beyond your friends and family.
Test your theory without spending extravagantly. Develop a name for your product and register a domain (it doesn’t need to be perfect as you can change both at a later date). You can easily set up a template landing page for your new website through WordPress with your new domain name, and embed an analytic function in the page (e.g. google analytics). This tool will allow you to see the traffic to your site. If you are unsure how to do something, Google it and thousands of “how to” videos and blogs will guide you.
Now create a very defined and concise one-sentence description that will fit in 70 characters or less to use in a Google Adwords style campaign. You can very inexpensively use Bing, Yahoo or Google to post your eye-popping text ad. This will allow you to test how people perceive your new project by seeing how many click the ad and end up on your new landing page. This will help determine their interest level.
4. Determine Your Costs
More often than not, we become involved with a new idea only to find that it’s too expensive to carry out. You might have a fantastic idea for a new product that you think you could sell for $29.99, before discovering that it cost $24.50 to make. If this is the case, you don’t have a functional business model.
You must figure out the cost of producing your new product. Keep in mind that you want it to sell for at least 5-8+ times more than it costs to produce, particularly if you intend to use standard distribution channels.
Selling a service can be considerably more tricky than selling a physical product. Just don’t forget to include expenses such as the cost of manufacturing setup, molds (with the number of uses per mold) and the cost of shipping when determining your cost per unit.
Consider these points when deciding whether your idea could become a potential business or should remain in your head. There’s no reason you should be spending thousands of dollars for what you could accomplish with hundreds.
Adam Callinan is the Co-Founder/Co-CEO of BottleCamo, the simple yet practical solution to the warm beer and broken bottle epidemics that have plagued the world for centuries. Adam is also the Founder/CEO of PiCK Ventures, Inc., the parent company of PiCK, a mobile wine technology company. Follow Adam on Twitter @Adam_Callinan & @BottleCamo
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