Startup Diaries: Brainwave to Business!
Sona Ramani explains the important things to consider when setting up a new business and the potential difficulties and pitfalls that can occur when balancing all the key elements.
In the future, we will look back at this decade (2010-2020) as the beginning of an economic revolution as significant and world changing as the Scientific Revolution of the 16th Century and the Industrial Revolution of the 18th Century. We are currently living in the “Entrepreneurial Revolution” that will permanently reshape businesses and more importantly, change the quality of life across the entire planet for all who come after us.
Entrepreneurs are, by and large, seen as business leaders and innovators of new ideas and business processes.
To be an entrepreneur is to think differently.
While most people go find jobs, entrepreneurs create jobs. While most people take refuge, entrepreneurs take risks. Their goal isn’t to think outside of the box but to own it - they don’t follow the market, they define one! There is no hard and fast rule that age is a matter of consideration for entrepreneurship. When you start your own business, you have total responsibility- the glory is all yours when things go well, and of course the problems are all yours when they don’t.
What exactly does an entrepreneur need to start their business?
The first step to getting what you want out of life is to decide what you want. Once you have decided to be an entrepreneur and are all geared up to start off, you should know where to start! That is when a brainwave - the whole idea behind your business - should have sparked. Keep your ideas simple. It could be a complicated process but keep the idea simple.
Suppose you are going to run a coffee shop, whatever the difference in operation, just call your idea a coffee shop and avoid the additional details. If you cannot explain your idea in one sentence or within thirty seconds then it is probably too complicated. Be open to share your idea without having the fear that someone might misuse it. Sometimes when you voice your idea aloud, you will feel good about the whole thing, and it will also give you a clearer picture the more you talk about it.
The popular perception is that typical entrepreneurs survey people about products, read magazines and newspapers in search of new product ideas, spot new business opportunities by looking at regulatory or demographic changes, browse book shelves in libraries, internet search, attend seminars - all in the hope of finding an idea for a new business. The reality is different.
Most entrepreneurs believe that the best business ideas come without searching for them and most get their ideas from their experience working in an industry.
Having an idea for a new business is one thing, starting a new business is another one entirely. Starting a business is a process, not an event. There is no single step that you can take to start a business. When you are starting a business, you are probably starting with a blank slate with no capital, employees, products, sales, or a host of other things that you will need to survive.
As rightly stated by Sir Arthur C Clarke, a famous British science fiction writer, “Every revolutionary idea evokes 3 stages of reactions - 1. It’s completely impossible. 2. It’s possible but it’s not worth doing it 3. I said it was a great idea all along”. These will all be heard by entrepreneurs at different stages of execution.
Once you are ready with your idea, you need to run a self-analysis on what the business is - the category of business. Will it be a product or a service? What is the cost to provide/produce? Is the margin realistic? What are the projected income and profits? etc. You need to be sure who your first, hundredth and thousandth customer will be and when you will reach out to them. This analysis can additionally be supported with the help of your friends, mentors, and well-wishers. Your analysis should essentially cover the following:
Who - who buys, specifies and uses the product/service?
What - What price do buyers pay?
Why - Why do they have to buy yours?
When - When do they buy? How often in what quantity?
Where - Where do they get it from?
How - How do they order (OR) how long can they store/use it?
All entrepreneurs must ask themselves three vital questions that concern their proposal. Where are we now? Where do we want to be? How do we get there?
These analyses will give you a realistic picture for laying out the foundation for your proposal. Upon completion of this, you should be able to jot down the USPs of your product/service and emphasize the features. Make sure to get an answer as to why the end user should choose you over the existing ones, if any, or use yours anew. Also make sure that you are not in an oversupplied market.
The next stage is to do a thorough market search. You could not have just started off with implementing your idea in the first stages - a basic market research should have been done to check if the product/service already existed! Make sure you don’t miss a thing here.
Great plans are nothing with poor execution.
All business planning is dynamic and iterative, so, a plan once written remains a living document - it does not disappear into a drawer never to be seen again, but is constantly being worked on, checked on and updated.
All you now need to start is a business model; an excellent framework by which to describe, analyze and reinvent an existing idea. At the most basic economic level a business model is the logic by which an organization sustains itself financially. It is a blueprint describing an organization.
Much of today’s job market turbulence is driven by factors beyond our personal control - recession, sweeping demographic changes, intensifying global competition, environmental issues, and so forth. These changes are also beyond the control of most enterprises but they profoundly affect the business models that companies use. Because they can’t change the environment they operate in, companies must change their business models in order to remain competitive.
Essentially, there are 9 building blocks to an effective business model. An organization serves CUSTOMERS by adding VALUES to their needs through different CHANNELS to establish/maintain CUSTOMER RELATIONS which generates REVENUE to create/hold back KEY RESOURCES to perform KEY ACTIVITIES that deliver the above elements, who also engage KEY PARTNERS in the form of outsourcing to complete some activities (as it is impractical to own all resources) which in turn will cut down on COSTS and show better profit margins and ensure scalability.
Before you launch your product into the market, it is safer to test drive your idea. By test driving, what I mean is to trial your market for your product to ensure that it does really have a market. Time of launch and the requirement in the market is very important. You should probably try a pre-launch trial for your target customers or online promotions which will give you a better understanding of the scalability of your product.
With a sound business idea and the right approach, millions have already shown that you can definitely run a successful business and have a better balance in life as a result.
But... just a business plan and a working model is not sufficient. To ensure you have a running business model, the main element required is of course capital. New businesses rarely show profits in the early months of operation. Generating sales takes time, and receipts are not usually sufficient to offset start-up costs and monthly expenses. Therefore, entrepreneurs need to estimate how much money they need and then raise that amount to transform their dream into a reality.
Many entrepreneurs struggle to find the capital to start a new business. There are many sources for financing namely personal savings, family and friends, credit cards, angel investors, venture capitalists, government-run programs, etc. The pros and cons of each is to be studied and the best is to be chosen according to the individual requirements
Legal advice should be sought at all stagea of an entrepreneur’s journey. Intellectual property is a valuable asset for an entrepreneur. It consists of certain intellectual creations by the entrepreneurs or their staff that have commercial value and are given legal property rights. Examples of such creations are a new product and its name, a new method, a new process, a new promotional scheme, and a new design. A fence or a lock cannot protect these intangible assets. Instead, patents, copyrights, and trademarks are used to prevent competitors from benefiting from an individual’s or firm’s ideas.
Every entrepreneur should be aware of intellectual property rights in order to protect these assets in a world of global markets.
Even before we in the developing countries knew what the word Entrepreneur meant, people in America and the western parts were given the opportunity to do what they wanted to do! That is all one can expect a nation to do. The rest is up to you - to educate yourself, to learn communication and people skills, and try all sorts of ventures. The rest of it is just hard work, being in the right place at the right time. Always remember, you need not worry about failing many times, look forward to winning once and the game is yours!
Picture courtesy of ddpavumba/Free Digital Photos.net
Sona Ramani has over six years of experience with start-up companies and has been instrumental in establishing both small and medium scale businesses. She has a Bachelor of Engineering from Rajalakshmi Engineering college and her work experience includes both Marketing, Public Relations and Research roles.
She is also a social entrepreneur with an interest in many environmental issues such as beach cleaning, save the turtle campaigns and plastic recycling. She has strived to further the cause for women entrepreneurs and was awarded the Cherie Blair Foundation for Women – National Entrepreneurship Network (CBFW-NEN) Fellowship for her contribution to this mission.
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