Five Steps To Turn Your Business Idea Into A Reality
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When you have a great idea for a business, the thrill can drive you headlong into an energetic launch. But wait. Statistics show that over 50% of businesses fail in their first five years– with 30% failing in the first year alone.
There are several reasons why businesses go down, but this early failure rate is usually the result of poor planning. For a business idea to succeed, you need to follow methodical procedures to ensure you launch from a firm base. And the first question to ask is whether your idea is as smart and original as you think.
1. Research the market You may think you’ve come up with a fool-proof idea, but is there a market for it? Many businesses launch, only to find someone else has already had the same idea and has got into the market first. Or the potential market is so small that you’re never going to be able to make a sustainable income from it. You need to carry out a full market analysis of your idea and the target audience to ensure your idea is really going to fulfil a need.
Start by doing a SWOT analysis on your proposal, defining all the strengths, weaknesses, opportunities, and threats associated with it. Involve all your business associates, or friends and family members if you’re working alone. Going through the process will help you to evaluate and refine the concept at a high level- questions to ask include:
- What demand is there for your idea?
- If it is a product, who will buy it?
- If it is a service, who will use it?
- Who else in the UAE does this already?
- Are they successful and, if so, why?
- What price can you put on your product or service?
As you build up answers to these questions, you will form a clearer picture of whether or not your idea is sound. If it’s not, let it go.
2. Compile a financial plan If your market research is positive, and you decide to proceed, the next step is to put together a financial forecast. This will become a valuable guide when you’re up and running and is essential if you’re applying for funding. The more thorough your market research and your financial plan, the better chance you stand of securing investment. This also applies if you’re relying on friends and family for launch capital– often the preferable option because the terms are more favorable. But take a professional approach and make sure you have an agreement in writing. There’s nothing like unpaid debts to turn a relationship sour.
Your financial plan is a key part of your overall business plan, forecasting how the figures will add up. It needs to include sound estimates of overheads, cash flow, income, profit/loss and investment stages, usually projected over three to five years. Of course, these figures will be largely theoretical, but they need to be based on reality, so do your research. An accountant or business startup consultant will be able to help you.
3. Position your product or service So, you’ve ascertained that there is a market for your idea, and that the figures work out. Now it’s time to prepare your idea for market. You need to be able to describe quickly and clearly what it is you’re selling. Potential customers have a very short attention span, so you need to grab them in a matter of seconds.
Start with the benefits. What will your product or service do for its customers? What need or problem will it satisfy? Explain it in language that your target customers will understand in under 30 seconds. When Steve Jobs of Apple launched the iPod in 2001, he didn’t describe the new device as an MP3 player with a 5GB hard drive. He introduced it as “a thousand songs in your pocket.” The audience understood the proposition immediately. When you’re happy with your messaging, test it on friends and family, or your startup consultant.
4. Build your brand The most successful businesses are instantly recognizable in many ways: their name and logo, their strapline, their colors, their use of imagery, their tone of voice. All these factors make up their brand. You don’t have to be a large, established company to have a strong brand. By paying attention to all these aspects, you can build a new brand that quickly catches on and gains recognition.
Consistency is key. Your brand needs to be an unwavering reflection of your values, but it also needs to reflect the values of your target customers. You can develop your brand personality by thinking of your product or service as a person or an animal, for example.
With the help of a branding expert, you can translate your brand personality into a look and feel and tone of voice, with brand guidelines to follow for consistency. It’s the consistent application of these guidelines across all your marketing that gives your idea life as a brand.
5. Set up a legal company With your big idea developed and tested, you’re now at the stage to formally set up your business. There are various ways you can do this in the UAE. Cutting corners, though, could jeopardize your company before it even starts. The best approach to setting up a legal company is to use a reputable company formation specialist. They will listen to your needs, explain the options and propose the best way forward. They can also complete all the paperwork, set up a corporate bank account and make sure you stay legally compliant.
Patience is the key when turning a business idea into reality. Applying the above steps in order should help avoid the pitfalls of building your house on flimsy foundations. Most importantly, share the process. Listen to constructive criticism and take professional advice. After all, this could be a life-defining venture.