How to Turn Your Idea Into A Profitable Business
Research shows that only a handful of business companies pass a successful first-year mark and only half of those survive the five-year mark. The percentage ranges between 45 percent to 51 percent of business companies depending on business ideas.
CB Insights studied more than 100 failed business startups and concluded that the main reasons behind business failures are lack of capital and pricing structure. Lastly, the product they’re trying to sell doesn’t resolve customer needs.
Founding an idea alone isn’t enough to run a profitable business. Even an idea with a lot of potential can fail if the founder lacks experience.
It’s easy to be overwhelmed when launching a real estate or life insurance business. However, every entrepreneur can follow a few tested steps to transform their idea into a successful and sustainable company.
Follow these critical steps to get your idea in motion:
Every business idea comes down to one thing: is it solving a need? Many small businesses fail due to not meeting this fundamental criterion. What makes a business idea great is that it resolves customers’ critical needs.
Once you’ve identified the market need, you then pull the trigger and continue to work towards a business launch. Your market need will also affect all the other aspects of the business, such as pricing and target customers.
A new entrepreneur can easily be infatuated with the idea and lose focus on whether the business is providing any solutions. Not only that, but your business should also be eliminating customers’ problems.
For example, Amazon resolved customers’ e-commerce issues. At one time, e-commerce was extremely expensive and inconvenient. Today, more than 230 million people in the US prefer to shop online. Amazon provided a solution and eliminated many associated problems.
The bottom line is your business idea should have the potential to bring solutions and eliminate customers’ problems to be successful in the long run. If your customers aren’t dependent on your services, it’s unlikely to succeed in the market.
Finding Your Market
After coming up with a unique business idea, you’ll need a find your target market. Finding your ideal customer in the pool of consumers in the market should be your next step,
Every customer has different needs that require a different solution. Your job is to figure out how your business will benefit your market.
One of the biggest mistakes a new entrepreneur can make is failing to understand their target market. Instead of blaming the market because your idea wasn’t ‘sold’, do some research on how you can make your products more compelling to the audience. Ensure that your audience understands that your solution is different from what they already have.
Create a Financial Plan
Your business is going to be as good as your financial plan. After completing your market research, create a solid financial plan covering every aspect of your business, including employment, ROI, marketing, etc.
Creating a financial plan will give you insight into how your business will operate after its launch. You may get some help from a professional if you lack experience in finance. Verify all the projections and examine your market to get an idea about the overall profit.
Once your financial plans and models are created, you can then approach a mentor or your team members to discuss and map out your vision and objectives. This will ensure that all the team members are on the same page, and you can carry on to the next step.
Many entrepreneurs don’t have the required capital while starting a new business. To run a successful business, you’ll need a regular inflow of cash to pay your employees, buy raw materials, and cover unexpected costs.
Without cash flow, you wouldn’t be able to improve your business’s efficiency. Here are some common ways of attaining funding for your business:
- Finding an investor
- Taking out bank loans
- Government subsidies
- Venture capital
Regardless of which capital funding source you may choose, there will be certain risks and rewards attached.
A minimal viable product is a technique where you can get feedback from early customers before officially putting your product on the market. This will ensure that your target customers will like your product, and in case of any issues, you can easily make alterations without losing a lot of money.
Through MVP, you will be able to collect data that will improve your product and even get rid of the unneeded features.
Building Your Brand
Make sure that your business is instantly recognizable among the audience. You may use eye-catching logos, a brand slogan, and an attention-grabbing brand voice to make your business unforgettable. These factors can help you make your brand more visible in the market.
By paying attention to the factors mentioned above, you can build a new brand from scratch and gain recognition among the audience.
You should remember that while building your brand’s image, unwavering consistency is the key.
You can get help from marketing professionals who can translate your brand’s personality to your customers. However, make sure that whatever guidelines you follow, you should remain consistent for years to come.
Finding a Pivot
All the information you’ve gathered through market research isn’t necessarily always responsive. If you find out that your audience feedback is completely different from what you’d anticipated, you’d need to ‘pivot’ your business model.
Changing business direction can be difficult. However, it doesn’t mean that you’ve failed. It means that you’ve pointed out your business pitfalls early on, which will help prevent future failures.
Pivoting your business is just a way of recalculating everything and finding a different and better route.
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