So, you had a great business idea in the middle of the night, and now you’re ready to quit your day job and start a new business!
But is the business idea that great? And is the idea backed up by a workable business model and business plan? Does the business idea furnish good opportunities?
Goodness me — are you confused yet? Well, hopefully, you won’t be after reading this article.
In the usual business terminology, a business idea refers to the overall notion of what your business is going to be about.
At the stage of an idea, a business has no real plan behind it.
Think of the business idea as the seed from which the central model and opportunities will grow.
The basic idea needs to be one that has potential for growth. Sometimes, the idea is sound, but the current landscape won’t allow for growth — this can be likened to a perfectly good seed that wouldn’t grow in the desert.
For example, opening up a restaurant might be a great idea, but doing it during a nationwide lockdown won’t allow for initial growth.
Every business idea needs to be tested. The best way to test your business idea is to pitch it to a specialist consultant who is experienced in all matters of business, including legal, accounting, entrepreneurial, etc. We offer this service at Start My Business.
Really, we’re not going to get into overly semantic discussions of theory here describing the difference between an idea and a concept.
In the business world, you can use the two terms interchangeably.
Although you might have an excellent business idea, there might be no opportunities to execute that idea.
Sometimes, the solution to that is to simply create those opportunities. Other times, it might appear that the opportunity isn’t there when it is actually just hidden.
An opportunity is a chance to gain an advantage. If you’re selling umbrellas and you see someone standing in the rain with no umbrella — that’s an opportunity.
The idea doesn’t need to come before the opportunity. Sometimes, people see an opportunity and then come up with a business idea.
If you sell umbrellas, but there isn’t a cloud in the sky, you can create an opportunity by renaming the umbrellas to parasols.
That way, you create an opportunity for people to buy a parasol and protect themselves from the sun. Or there might not be a cloud in the sky, but the forecast says rain is guaranteed within the next hour. That’s a hidden opportunity.
Think of the business model as the overall structure of the business — how it will make money, who it will target, where it will be located.
Some people refer to the business model as a business plan. That’s not correct.
A business plan is a very specific thing (which we’ll discuss in a moment), full of numbers and figures and marketing strategies. The business model can be summarised in short phrases.
Here are some examples of business models:
A business plan is a tremendously intricate thing that a company absolutely must have in order to obtain any sort of financial assistance to get off the ground.
A business plan would incorporate the business idea and model into it. A business plan really gets down into the nitty-gritty of everything.
How is the company going to make sales? How is it going to market itself? What is its precise product and service?
A business plan must include Profit and Loss predictions, Cash Flow predictions, a SWOT analysis, Milestones and KPIs, and so on.
The more funding your company might need, the more detailed your business plan must be. We offer a service to create a professional business plan for your business.
All businesses start off with a Business Idea or Concept. Sometimes that idea or concept is only half-formed, but it becomes clearer as one analyzes the available opportunities and starts working out one’s business model and business plan.
Business Ideas sometimes appear as a result of spotting an opportunity.
Often, a business idea is determined to be unsound because no opportunities exist. In this case, it is sometimes possible to create opportunities or to find hidden opportunities.
Opportunities continue to reveal themselves during a business’s lifecycle. Working out your business plan often reveals many hidden opportunities.
Once you have the business idea in place and some notion of the opportunities that are present or need to be created, you can start to work out the business model and the business plan.
Preparing a business plan is an enormous task, and often it is best done using professional advisers. That’s why it is absolutely vital to test your business idea thoroughly by pitching it to an expert before doing anything further with it.
Knowing if your business idea is fundamentally sound before embarking on the formidable task of preparing a full and complete business plan is crucial to prevent yourself from wasting endless time. But it is also crucial to save yourself a lot of heartaches. Nothing stings worse than believing firmly in an idea that simply cannot succeed but realising it too late.
You must test your business ideas out!
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