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Start-up Advice

3 Crucial Questions To ‘Fail Proof’ Your New Business Idea

Risk is inherent but minimising it is pretty much common sense, when you stop to think about it.

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Starting a successful business is hard, but let’s not presume that entrepreneurship itself is intrinsically riskier than other things that popular culture deems as “acceptable.”

You’ll never be able to completely avoid risk, either in your personal or professional life, but you can mitigate it significantly by having a solid game plan in place. You need a proven system that will help you determine which ideas are worth pursuing so that you don’t become a statistic of America, Inc.

You want to be as certain as possible that your business will succeed before you launch. In other words, you need to “fail proof” it. Luckily for you, I’ve developed a process to get you as close to 100 percent sure as humanly possible.

I call this process “Three Question Validation.”

At it’s core, Three Question Validation involves answering three pivotal questions to determine if your business idea is viable and likely to succeed. It’s a compact method to test if your idea holds water before you waste the time, energy and money on something that isn’t going to work.

Related: 5 Ways To Validate A Business Idea, Right Now

If you can say “yes” to all three of them, you have an idea that’s likely to do very well. If you can’t say “yes” to all of them, it’s time to go back to the drawing board.

1“Is there competition in my space?”

Contrary to popular belief, you want competitors in your space. If you find a market that’s 100 percent unoccupied you’re either the first one there (risky in that nothing has been tested) or you didn’t get the memo (other people have tried unsuccessfully and abandoned the market).

Being the first isn’t horrible, but there’s less of a roadmap to follow. Being last doesn’t mean that you can’t find a way to make your idea work in the marketplace…but that will take considerably more work.

Remember, the purpose of this freelance business doesn’t have to be finding the #1 thing you want to do for the rest of your life. It’s a bridge to freedom. It’s a tool to earn some more money as you get the rest of your life in order. Over time, you may find other things you like more. That’s totally OK.

For now, let’s try to pick something that has a high probability of succeeding so that you can build your confidence, business savvy and skill set.

Pick something where there appear to be many other people doing what you’d like to do. If you can answer “yes” to this question, it’s time to move on to the next question.

2“Are my competitors making money?”

competitor-sales

A bit of a no-brainer, but very important to consider: Even if there are people doing what you want to do, you need to make sure they have enough clients and are making the type of money you’d like to make.

This step will ensure that it’s worth your time to invest in your idea. There are a bunch of different ways to tell how well your competition is doing. You could look on their website for testimonials and client success stories. Browse through their portfolio if they have one.

Related: 10 Business Ideas Ready To Launch!

You could stop in (if they are local) and talk to them, or give them a call over the phone. Ask about rates, schedule and typical client experience. (Obviously, don’t tell them why you’re doing the research.)

I love looking at unbiased third party sites like Yelp to see what their rating is, and what customers have to say. You don’t need to get exact revenue numbers. The point here is just to get a general sense for how they’re doing. If other people are successfully getting clients and customers, so can you.

3“Can I do my product/service/idea differently and/or better?”

This is the question that ties everything together. You’ve found your competition. They appear to have some business. Now what?

It’s time to make your stand by standing out.

For customers to buy your idea instead of, or in addition to, another company’s, you must show why your product or service is different and/or better. If you can show why you’re unique, you’ll attract just the right customers who are perfect for your business. The type of clients who will buy from you time and again, and who will continually refer you to all their friends.

This point of difference between you and your competition is called a USP, short for “Unique Sales Proposition.” Here are five examples of how to stand out with a Unique Sales Position:

  1. Better/lower price
  2. Convenience
  3. Better quality/aesthetic
  4. Better variety
  5. Better customer service or guarantee.

Related: How To Find Your Next Big Business Idea

There’s no “right” USP, and you don’t only have to stick to one. Test your market. These are some ideas to get you started immediately.

This article was originally posted here on Entrepreneur.com.

Daniel DiPiazza is the founder of Rich20Something, where he teaches young people how to start businesses that they care about and live happier lives. Grab his Startup Series – a free "mini-course" designed to jumpstart your productivity, help you overcome tough obstacles and launch a project you care about quickly.

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Start-up Advice

How To Turn Your Side Hustle Into A Full-Time Gig

It will be scary, but also incredibly rewarding.

Nicolette Amarillas

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Few people are lucky enough love their 9-to-5s, and more and more people are finding themselves doing something else on the side, either to add to their income or to feed their passion. Sometimes, those “side hustles” start to feel more and more like “the real thing,” and suddenly these people are dreaming about running a business of their own. Sound familiar? If you’re one of the thousands of people dreaming about turning your side hustle into a true business, you’re not alone.

Moving away from a steady, full-time position to being on your own is the scariest, yet most invigorating feeling in the world. I’ve found most people consider entrepreneurship either unattainable or, honesty, highly romanticised. The reality is that neither is correct. Being an entrepreneur is a ton of work, but it’s also completely possible.

1. Be clear and honest with yourself about when it’s time to make the jump

Giving up the benefits and security that come with a full-time job is scary, and sometimes unrealistic, but it’s also dangerous to keep waiting until the time “feels right.” Ask yourself exactly what you need to have before you can make your side gig your new reality. A good rule of thumb is to have enough savings to live for about six months without income, and/or with the income you already have from your side clients.You should also have a clear idea of who your potential clients might be and how to connect with them.

Related: 20 South African Side-Hustles You Can Start This Weekend

After taking care of the logistical considerations, try to avoid dragging your feet. According to the British Psychological Society, you’re 91 percent more likely to accomplish something if you give yourself a deadline. So do it! Hold yourself accountable. Maybe you’re not willing to stay at your current job beyond a certain date, or maybe there will be other indicators that will make you certain that it’s time to go.

If your current role isn’t fulfilling and the passion is gone, it may be the perfect catalyst for making the jump.

Both of my businesses came to fruition because of my own realisation that I wasn’t flourishing in my current roles. I wasn’t the best, I wasn’t seeing the success I wanted and instead of feeling defeated, I changed directions. For me, the clearest signal that it was time to leave was that I didn’t believe in the goals I was supposed to be working toward.

2. Before you quit, put the processes in place to help your side gig scale

Early on, business organization and strategizing is a huge component of success. You’ll need to limit stress and create as much efficiency and ease as possible in your daily systems. This could mean scheduling things carefully, or using free software to make your work more effective. I try to divide the week into days assigned to different businesses tasks. Try as best you can to not switch back and forth between your different focus areas within the same day. Going back and forth between tasks that are not related is inefficient and breaks focus. Give your brain a break and keep yourself on one straight road each day.

Digitising your work can help, too. According to Accenture, companies that use cloud collaboration tools with their teams improve productivity, have greater clarity about what’s going on in their business and save money. When you first start out, it can feel silly to keep documents in a shareable cloud space (like Google Drive, DropBox or whatever option you like best), but you need to have the structures in place so that you’re organised and ready for the time if/when you hire a team to support you. This is a good thing to play around with before you quit your main gig. Having the tools and processes you know work well for you ready to go when you make the switch can make ramp up time easier.

It’s long hours, it’s always being “on,” its wearing too many hats, but it’s also incredibly rewarding. So, how do you successfully turn your side project or passion into a prosperous business? What are the steps? We all want the “1, 2, 3 and voila, here it is, a company of our own,” but realistically, how can we make it happen? I can only speak to my own experience, failures or what I like to call “directional pivots” and successes. There have been a few true catalysts that have helped me turn my two side gigs into full-time gigs.

3. Work hard, and be humble

Your time is valuable, but as new entrepreneur you can’t treat it like currency. What I mean is, be prepared to put in lots of hours with minimal return. Initially, time may not correlate with financial success; this is an incredibly important mindset to remember. Your time isn’t money, yet. It’s groundwork. Building a side gig up from the ground requires wearing a lot of different hats. If you want your business to succeed, you have to be ready to play customer service rep, salesperson, individual contributor and HR.

Related: 50 Jobs, Gigs And Side Hustles You Can Do From Home

If you’re feeling overwhelmed, break the work down further. Spend more time working on the day to day tasks, checking things off the to-do list. These are all working toward your big vision, but in small doable pieces rather than hefty overwhelming ones. Try not to consider any task “beneath you” and take some time to truly understand what goes into each part of your business.

You won’t have a boss telling you what’s right or wrong, so you’ll need to build a sense of self-accountability – one of the toughest parts of being an entrepreneur. Take notes about the challenges you face in each aspect of your business so that you’ll know what anyone you might hire will have to cope with. It’s your best chance to uncover important considerations and think about what resources might need to go where, down the line.

4. Surround yourself with smart people – even if you never plan to work with them

As much as entrepreneurship can be a solitary job, especially in the beginning, it’s vital to your success to remember how others can help you thrive. Invest your time in like-minded people. Take time to get to know others and their stories and create valuable relationships. So much of success is built from opportunities or inspiration from people we know.

Find people you connect with to talk about your ideas, write about your ideas online and build a community that empowers you. Take advantage of those around you who want to see you succeed. You’ll be surprised at how much people want to help!

Related: 3 Ways To Set Your Side Hustle Up For Success

The number of new startups and small businesses has dropped dramatically in recent years, nearing a 40-year low in 2016. The landscape has gotten tougher, which makes being an entrepreneur scarier. Turning a side hustle into the real thing is not easy, and I’d be lying if I said I loved every minute of it. But, just as with most other big decisions in life, there are always lessons to be learned no matter what happens. Be thoughtful, take smart risks and see where your “side hustle” can go.

This article was originally posted here on Entrepreneur.com.

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How To Keep Big Ideas From Being Big Failures

Simple, Yet Effective Business Advice from Clients on Demand Founder, Russ Ruffino.

Jeff Broth

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As an entrepreneur, it’s not uncommon to have big ideas. Ideas that, if worked properly, can take your business to higher levels.

Maybe you’ve came up with a way to enhance your products or services that would advance your company lightyears ahead of your competitors. Or perhaps you’ve thought up a new gadget or tool that, once developed and released, could potentially change the world as it exists today.

The problem with having these big ideas is that sometimes they fail. And they can fail hard.

Big Ideas Can Equal Big Failures

Take Coca-Cola, for instance. On April 23, 1985, this well-known company announced that it was changing its formula and releasing the “new Coke.” While its goal was to update a soft drink that had been 99 years in the making, it actually had the opposite effect. Consumers were mad. Real mad.

People had grown to know and love the taste of Coke, so the thought of it changing didn’t sit right with their taste buds. Many protested the company’s actions, creating such a stir that, in addition to being picked up by news sources everywhere on that day, it is still being talked about today.

Ultimately, Coke recovered and is still loved by many. However, it easily could have went the other way, potentially causing a revolt big enough to force them to close their doors.

So, what can you do to take your big ideas and turn them into wins versus risking them becoming huge failures capable of sinking your business? According to one entrepreneur, you simply do a numbers test.

Related: 3 Companies With Memorable Slogans, And How To Create Your Own

The Numbers Test

In a People Stack Podcast, Russ Ruffino shares that his company, Clients on Demand, is on track to earn $20 million this year. This number is up from $4.5 million in 2016, just two short years ago, and Ruffino says that one thing has helped him reach this level of success is that he and his team use data to help them decide what to do. “We always run the numbers,” says Ruffino.

For instance, if your big idea is to recreate one of your current products, how much will it cost your company to make and test a prototype? What about manufacturing costs on a larger scale?

Think also about expenses related to marketing the updated product line and costs associated with creating enough buzz to get it to really sell. Put them all together and see what the numbers are telling you.

Sometimes New Isn’t Better

You may just find that newer isn’t always better. In fact, Ruffino says this is typically the case as, usually what he finds at Clients on Demand is they can typically “get to our income goals faster by just getting a little bit better at what we’re already doing.”

Benjamin P. Hardy, a former top writer for Medium.com in the self-improvement and entrepreneurship space, agrees and adds, “It doesn’t matter how good your strategy is, if you’re not skilled at what you do, that strategy won’t take you very far.”

That’s why Hardy recommends that you put yourself in challenging situations. “This is how you evolve,” he says. And be sure to follow your own path and keep your why’s in front of you along the way to remind you of what is driving you forward. Let these motivate you when times get tough.

It’s only natural to come up with big ideas in business. That’s what being an entrepreneur is about. Just make sure you follow your numbers and those big ideas can potentially become big successes.

Read next: 10 Business Ideas Ready To Launch!

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Start-up Advice

6 Tips For Launching Your Global Brand

Here are six tips to help launch your business into exciting new markets.

Gary Webb

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Since sanctions ended, South African businesses have been spreading their wings and taking the plunge into global markets. South African brands are strong way beyond national borders and out of a list of 25 most valued African brands, 13 are South African, 11 are Nigerian and one is Kenyan.

But for businesses that have been restricted to domestic markets, making the transition to access global markets can present a number of challenges. Commonly, these include, but are no means limited to cultural differences, local tax laws, hr and payroll.

1. Keep you scope realistic

As a brand new to the global market, you are not going to be able to take advantage of every opportunity that comes your way. You are better served focusing your limited resources on markets that can provide a substantial customer base, cost efficiencies via less expensive labour and materials, or a business-friendly environment.

If an opportunity offers one or more of those advantages, it is worth pursuing. Above all, remain focused on your international business goals and do not go chasing after every opportunity that presents itself.

2. Build up a strong infrastructure with technology

Powerful personal technology allows regional teams or individuals to manage their workloads remotely from their laptop and smart phone.

Cloud technology allows overseas staff to work as effectively as if they were in the head office. Being able to provide service support at local times, in the customer’s own language gives you a huge edge on other small businesses and even allows you to compete for business from local competitors.

However, you’re dipping your toe into the international arena. Don’t buy expensive software systems that may not be needed until much later down the line. Look for simple cost-effective support for your in-country personnel. This strategy is much more cost efficient as you make your early transition into new markets.

You must also take into consideration that, as you grow globally, your data has the potential to be stored in more and more disparate places. Unifying your data stores and managing a globally standardized policy of data storage will keep you secure as your business expands.

3. Understand the obstacles and opportunities of overseas regulation

For companies looking to expand into European markets, the General Data Protection Regulations (GDPR) will need to be taken into consideration. These data security regulations put very specific duties upon any company that holds the data of EU citizens. This includes EU customers and any local EU staff you may choose to engage to do work for you on the ground.

There are also many options available to investors looking to do business in overseas markets. Many countries are excited about receiving foreign investment and have tax breaks and structures in place to make it easy for companies to enter the market. Having an understanding of these opportunities and the benefits you can help yield the direction of your investment.

4. Take advantage of foreign expertise

There’s no need to waste time learning the language, culture and legislative complexities in every country. Work smart and pick up experts to enrich your talent pool and give you a head start in global markets. Once you’re established, you can roll out a more in-depth training programme.

Picking up local talent is the quickest way to get unlock knowledge and understanding of the local business environment. Having boots on the ground, even one pair, can give you a huge edge in many markets, and help establish your international business.

5. Get a grip on paying staff overseas

The most straightforward way to enter a new country is to establish a commercial presence inside its borders by registering with applicable authorities, acquiring a local taxpayer ID, and putting overseas employees on an in-country payroll.

This option obviously comes with a significant upfront cost and may not be suitable for all businesses. However, there are many options available, including secondment to allied business interest, immigration or local affiliates. Part of the challenge in launching your market overseas is establishing a cohesive HR structure to ensure smooth running of your business all over the world.

On average, you need 14 pieces of employee information to process global payroll. These include employee name, age, pay scale, tax code, bank details and so on. More data means more complexity. In addition, you have to consider any regional reporting obligations you may face.

This is why France has the most complex payroll in the world. As well as needing 16 separate pieces of data to even pay someone in France, the French government demands much more detailed reporting than other countries.

Some payrolls change on a regular basis, so you need to keep up. Take Italy, for example. Collective Labour Agreements change frequently, seemingly randomly and are all unique. Contribution amounts, legal work hours, overtime rules and the number of pay cheques per year all vary according to CLAs. If that wasn’t complex enough, CLAs are renewed and renegotiated every 4 or 5 years. 25% of them are renewed annually. This means that pay runs can potentially differ massively year after year.

Getting a handle on these complex aspects of payroll compliance are essential if you want to start expanding into global markets with boots on the ground.

6. Immerse yourself in the culture

Every culture has a different approach to doing business. In order to cultivate lasting relationships with business partners and clients, you need to walk a mile in their shoes and embrace the way they do things.

For instance, the formality of address is a big consideration when meeting people for the first time. Do they prefer titles and surnames or is being on the first-name basis acceptable? While it can vary across organisations, Asian countries such as South Korea, China, and Singapore tend to use formal “Mr./Ms. Surname,” while Americans and Canadians tend to use first names.

The concept of punctuality can also differ between cultures in an international business environment. Different ideas of what constitutes being “on time” can often lead to misunderstandings or negative cultural perceptions.

For example, where an American may arrive at a meeting a few minutes early, an Italian or Mexican colleague may arrive several minutes after the scheduled start-time and still be considered “on time.”

Local companies looking to maintain growth rates will often expand into adjacent activities or verticals to avoid the natural limitation that comes with a singular focus in one geographic market.

Going global is an alternative that can allow you to retain your specialism and grow at the same time. Specialist companies exposed to large markets are valued highly by investors. So maybe it’s time your business made the transition into the global marketplace.

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