- How can I tell if I have what it takes to turn my idea into a business?
- How can I tell if my idea is really worth making an attempt to turn it into a business?
- How do I protect my idea from being copied?
- What tools will be most helpful as I work my way through the stages of development?
- Should I do this by myself, or should I assemble a group of other like-minded people?
- Where do I turn to for help with the Idea stage of the process?
The business with the most capital, largest labor force, and biggest production capacity can yield greater returns than a business with only half as many resources. But there is no guarantee that it will. The business with fewer resources may have a better idea of what consumers want, where the consumers are located, and how to package their product. It is not just a matter of how many resources you have, but also how well you use them.
1.1 Characteristics of Successful Entrepreneurs.
A national survey recently conducted by a leading consulting firm identified the top ten characteristics of a successful entrepreneur:
1. Recognizes and takes advantage of opportunities
4. Independent thinker
5. Hard worker
8. Risk taker
Source: Iowa EntreNews, Spring 1999
It is highly unlikely that you have all of those qualities. However, it is important that you recognize them as key ingredients to your project. If you haven't already done so, you may wish to consider partnerships or alliances that will bring more of these characteristics to your project.
1.2 Test yourself to see if you have similar qualities as other successful entrepreneurs.
Small Business Success magazine, a publication of the U.S. Small Business Association, conducted a survey of more than 100 very successful business owners. Their comments about small business success guided the creation of the following quiz. Choose the answer you think is best for each question. Use the grid at the end to determine your total point score and then see where you stand in the Success Quotient Ratings.
There are no "wrong" answers. Each answer listed represents a segment of the responses to questions in the survey--and the final rankings correspond with the importance successful owners gave to different answers.
The key to business success is:
- business knowledge
- market awareness
- hands on management
- sufficient capital
- hard work
If a relative ever asks me for advice about starting a business I will tell them to:
- work for someone else in the field first
- write a business plan
- study marketing
- give up the idea
- learn about budgeting
Which is the largest potential trouble spot:
- too much growth
- too little growth
- too fast growth
- too slow growth
- sporadic growth
I trust: (select as many as apply)
- my partner
- a few key employees
- my customers
I am unhappy when my employees are:
- abrupt with customers
- less dedicated than me
My customers are: (select as many as apply)
- always right
- too fussy
- worth listening to
Rank these in order of importance for small-business marketing success:
- community events
When it comes to money I am:
- too carefree
Financially my firm:
- has trouble with cash-flow
- has a good line of credit
- is financed totally by receipt--no credit
- is making a better profit this year than last
- knows exactly where it is all the time
In hiring people:
- I take far too long
- I look for the cheapest person
- personality is more important than experience
- I look for the best person, and am willing to pay
- I only hire at the trainee level
Concerning my employees:
- I treat everybody the same
- I try to talk privately to everybody once a week
- to whatever extent possible I tailor assignments to personalities
- I encourage them to talk to me about the business
- I try to work alongside them whenever possible
The real key to business success is:
- hard work and perseverance
- fine products and service
- knowing the fundamentals of business
- a constant threat
The best competitive advantage is:
- understanding what the market wants
- conducting a business ethically
- a detailed plan
- careful financial records
- in touch with my customers
- in touch with my employees
- trying new techniques
- wanting to retire
My dream is:
- to grow the business until someone else can run it
- to work until I drop
- to give up these headaches and have more fun at work
- to try another business
- to take a vacation
I think business plans are:
- for the birds
- nice but not necessary
- something I can do with my accountant
- useful and informative
- essential--wouldn't do business without them
What makes a terrific entrepreneur?
- consumer orientation
- technical proficiency
What does a business need most?
- market research
- a solid business plan
What is essential to marketing?
- a "sixth sense"
- market research
- customer awareness
Find each question in the scoring box and record the score for the answer you selected. If you didn't select the highest scoring choice, take a look at it and try to figure out why it scored so well. When you've worked through the entire quiz, go back and add up your points. Then, compare your total with the Success Quotient table to see how you compare with some very successful business people.
First bullet = 5, Second bullet = 4, Third bullet = 3, Fourth bullet = 2, Fifth bullet = 1
Score Your Business Success Quotient
75-100 You are a genuine entrepreneur whose operations reflect tried and true business practices.
50-74 Your business is probably headed for long-term success. But success will come sooner if you sharpen your awareness of solid management skills and marketing techniques.
25-49 While you may be enjoying customer loyalty and repeat business, never forget that savvy competition is always looking for ways to take the lead. Don't let comfort lull you into false security. Be creatively assertive!
0-24 You may well have the right product. But to sell it successfully, you need to increase your market awareness and improve your operating philosophy. Reach out for practical classes, seminars and advice from people who have good business track records. And - keep persevering. It's the key ingredient to winning!
The real question may be: "Is my idea right for me to turn into a business?"
A business must show a profit. Can you turn your idea into a profitable business? Unfortunately, there is no formula for discovering the answer to that question. However, an early look may give you some indicators of where you are headed.
For now, consider questions that will throw first light on the capabilities of your concept. Detailed feasibility studies will come later.
2.1 Very important considerations during the early conceptual stage.
As your project moves forward, it will be very important for you to address the strengths and weaknesses of your business versus those of your competition.
- Do you know your competitors?
- Is there currently another business using your concept? If so: Why is your idea better? Or, Is there a niche market that is not being satisfied?
- How will your new business capture customers who are presently patronizing established competitors?
2.2 More tough questions for early consideration.
- Do I have the necessary business skills to take this idea to the market?
- Why do I think this is a good idea?
- Will enough people buy one of these to allow me to make a profit?
- Can I go several years with no income from this idea?
- Will consumers know the purpose of this product when they see it?
- Would my neighbor want buy one of these?
- Does this idea respond to an increasing consumer trend?
- Do I know where the market is for this idea?
- Will this idea be easy for the consumer to use?
- Can this idea be manufactured with equipment already on the market?
- Does this idea shout QUALITY!
- Will this idea improve the consumer's quality of life?
- Who is waiting to buy this idea?
- Can this idea be modified to fit a broad range of styles and tastes?
- Will it be easy to get this idea to the market?
- Would I want one of these if I saw it?
- What will this look like by the time the consumer uses it?
- Does this idea really do something new?
- If no one else is already selling this idea: Why?
- Can I describe this idea in three words?
2.3 More places to look for indications on the potential of an idea.
There are hundreds of trade magazines presently in circulation. From soup to nuts, virtually every concept going has its own publication. If your idea is associated with food, get familiar with every food magazine you can find. Many of the trade journals will be sent to you free of charge if you write the publisher and let them know you may soon be a participant in their subject field of manufacturing, marketing, or processing. Your local librarian can help you find a listing of the available magazines and the addresses of their publishers. Or, a casual search on the Internet using any popular search engine will turn up a number of online trade publications.
Most local libraries also maintain current editions of The Thomas Register of American Manufacturers which offers profiles and information regarding over 125,000 U.S. manufacturers and service providers. The publication also offers access to its data via its own search engine at http://www.thomasregister.com/.
Trade shows are great places to learn about the general nature of the industry that will surround your idea. In addition to visual displays, trade shows frequently offer educational seminars on topics that are critical to a particular industry. Attendance may help you measure the potential of your idea, and see ways to expand your concept.
2.4 Ideas and tough love.
While unqualified love is a great trait to have as a parent, it could be disastrous for the creator of an idea. In the world of business and marketing, if your idea looks like it is going to be anything less than an ideal opportunity for you, be willing to let go of it. Invest your dollars, ingenuity, and effort where you can realize the greatest returns.
2.5 A final word about taking early measures of an idea.
Advertising agencies, marketing companies, and consultants will probably play an essential role in taking your concept to its greatest potential. But build your own knowledge base before approaching them for assessment and evaluation of your idea. Make sure you know enough about what needs to be done so you can be an educated first judge of their proposals and activities. Your prior knowledge and understanding will also help all service providers create more effective programs and campaigns for your idea.
A trademark or patent may be in your idea's future, but avoid getting limited resources tied up in the pursuit of one until you know what is really needed. Furthermore, if your idea is truly great, it will be copied no matter how you try to protect it. Some inventors and entrepreneurs look at duplication as the ultimate sign that their concept is a winner, and are actually flattered when they see copycats hit the market.
For now, a simple and inexpensive non-disclosure agreement may be a good way to protect your concept. It will tend to keep things private as you tell other parties all they need to know to help you.
3.1 The Non-Disclosure Agreement
A Non-Disclosure Agreement is used in an effort to make sure other parties do not spread word of your idea. The following form is only an example and should not be construed as legal advice suitable for your precise situation. Legal counsel should always be sought regarding wording and proper use of any types of performance agreements.
An open mind and a driving desire to succeed could be considered the most valuable tools. At the very least, the willingness to consider all options while pushing and pulling through thick and thin are surely ingredients for successful development of an idea. Concepts do not deliver themselves to the marketplace.
A telephone, answering machine, no frills computer with a universally accepted operating system, mid-range printer, fax, and internet connection will be extremely valuable tools for you during the early stages of your project. Keep things as simple as you can at this point. Communicating, gathering information and keeping track of details are going to be your main activities.
An understanding of how to access and search the Internet, create spreadsheets, and communicate via email will all be helpful as you begin making critical business decisions. Knowing how to create and read financial statements will be a requirement as you move into the business planning phase. If you don't already have those skills, a small investment in a short course may prove to be money and time well spent.
4.1 Make the most of public tools from the very beginning.
There is no shortage of software vendors with expensive customized products aimed at helping you manage and make business decisions. But until you know exactly what your business will need, make the most of free shareware that is available from several public service providers. The Small Business Association maintains a free library of software programs especially designed to help your start your business.
The answer may lie within another question: Do you have all the resources necessary to develop your idea, or will you need assistance?
Generally, groups assembled for the purpose of building a business work best when the development of an idea will potentially benefit all members and participants.
A number of benefits occur when people work together. A cooperative group of individuals with similar talents and interests can increase total understanding and opportunity. Early understanding of an idea grows when the idea gets bounced around between group members. When searching for solutions, the group provides a pool of experience and knowledge. Multiple appraisals of an idea tend to identify more obstacles, and more routes to success. For the individuals in the group, that should translate into a greater ability to avoid loss, and increased resources for taking advantage of opportunity.
"The whole is greater than the sum of its parts"; this is especially true when working in groups.
5.1 What are the characteristics of a successful working group?
Successful groups tend to be made up of:
- Members who trust one another.
- Participants that are willing to share responsibility.
- People with the same interests and needs.
- Members with similar skill levels and resources.
Successful groups tend to:
- Maintain focus on the objective
- Structure time carefully so meetings do not turn into social gatherings.
- Approach obstacles and opportunities positively and thoughtfully.
- Assess each member's opinions seriously.
- Allow all opinions to be expressed and heard.
- Exercise patience and tolerance with differing opinions.
Cooperative group work takes effort. Assembling a group should be approached as a professional exercise. Successful groups are not social clubs. It does not matter whether or not the group members are people who would otherwise spend leisure time together. It is important that all group members take responsibility for keeping up to speed, and for contributing everything they are capable of.
Before you start searching, review your goals at this point. In the first stages of exploring an idea, you are most interested in:
- General information about turning an idea into a business.
- Tips that will help you discern the validity of an idea.
- Ways to protect your idea as you discuss it with others.
- The tools you may need to take your concept to completion.
- Ways to organize effective groups.
Once you start looking, you are going to find an abundance of available assistance. A frequently followed path when searching for information moves from level to level in this manner:
While only a suggestion, starting locally and working your way to federal levels will insure your search is complete, while also providing an incremental understanding of the mountain of information that is available.
6.1 The Who, What, and Where of finding help with the Idea stage.
- Iowa State University Extension
- Community or County Development Group
- Rural Electric Cooperative
- Private Gas & Electric Utilities
- Local Library
- Workforce Development office
- Planning and Zoning Commission (Municipal)
- Small Business Development Center
- Resource Conservation & Development
- Council of Governments
- Community College
- Board of Supervisors
- Planning and Zoning Commission (County)
- Iowa Department of Economic Development
- Iowa Department of Agriculture and Land Stewardship
- Iowa Area Development Group
- Iowa Farm Bureau Federation
- Iowa Institute for Cooperatives
- Iowa State University Extension
- Iowa Workforce Development
- Iowa Department of Revenue
- Iowa Bankers Association
- Iowa Department of Education
- U.S. Department of Agriculture, Rural Development
- U.S. Economic Development Administration
- U.S. Small Business Administration
- U.S. Department of Commerce
- U.S. Bureau of Economic Analysis
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