The first 3 questions to ask when you have a business idea

Convert from idea to business

Have you ever had an idea that someone else in another part of the world have used to build a successful business? If yes, then there is a great chance that other ideas are hitting you but you don’t know what you should do next. This post will help you start the journey to transform an idea into a business.

As every big trip it starts with small steps, in this case 3 questions you need an answer to.

Three questions for a good structure around your business idea

  1. What is my Why?
  2. Who has my money in their pockets?
  3. How do I move the money into my pockets?

What is my WHY?

Don’t beg for money

If you do business only to become rich, then you are using the beggar tactic: put a hat on the floor, and hope for the best. This approach doesn’t give your customers (persons passing by)  any emotional connection and no clear reason to help. It doesn’t work well, as you can —unfortunately— see every day in the street.

The beggar tactic is not a great way to attract customers, investors or followers, and you need all of them for your journey.

“If you do business only to make money for you, then you are using the beggar tactic” – Frank Contrepois

Have a why and inspire others

Your new company will face competition. Maybe you want to revolutionarise an existing industry, or to create a new one.  In any case your resources will be limited, and you will have to find the best, focused, enthusiastic followers to help you achieve your goal. A  follower can be customer, employee or investor, your goal will inspire them to action: to buy, work or invest. The goal is your why.

Some examples of why:

  • The charity RNLI has a clear why: “To end preventable loss of life at sea”. It’s on their website.
  • General Electric: “GE imagines things others don’t, builds things others can’t and delivers outcomes that make the world work better”.
  • FrankContrepois.com: “Live and share how a life work balance is achievable for any work at any level”.
  • MGM: “Ars Gratia Artis”, translates toArt for art’s sake” and is visible above the lion figure at the beginning of every movie.

Questions to find your why if you want to revolutionarise an existing industry

  • What are you doing different?
  • Why do you want to change the market?
  • What will keep you unique even after becoming one of the big players?

Question to find your why if you create a new industry

  • “Why is the world going to be a better place thanks to your product?”

If you are to create a new industry, you need people to see the final goal and be clear that this is something that will change the world. By becoming followers, they will help you in the initial phase, they will support you during the steep learning curve , they will be part of the natural way of success (How to embrace failure and succeed).

Who has my money in their pockets?

Who are your customers? You have a unique opportunity to select your customers and to target them with a product that will WOW them. It’s of great importance that you channel your initial energy, squeezed time and limited resources toward a specific customer group with a very clear offer.

Select a niche

Select a niche market, be as precise as possible. Define:

  • What is the target age range?
  • Where do they live?
  • What is their income?
  • What do they do everyday? Try to write down a typical working and non working day
  • What are the activities they like to do?
  • How many of them are in the world?

Add as many elements as possible, the more you know them the better you serve them.

Go deep, you cannot serve all the world’s problems immediately. Even huge companies started from a niche market:

  • Sony: created the first electric rice cooker for after war Japan
  • Nintendo: first product were playing cards (paper ones) in 1889
  • Apple: a wooden hand made computer

Find the main pains and gains of your niche

  • What can you do to help?
  • Where are they wasting precious time?
  • What problems do they have?
  • Which job they usually do?
  • Which activities they delegate and you can do?
  • Which constraints do they have?

The easiest (and cheapest) way to start is by being part of your niche, you know what you want, why you need it and when. You will also have access to lots of people from your niche: your friends to get more detailed information. If you are going after a niche you don’t fully know, then doing interviews is the easier and cheapest way to start. A good methodology is explained in the  book Value proposition.

How do I move the money into my pockets?

This is the value proposition. It is what makes your product different and have people to buy it.

For a value proposition to be successful, it needs to:

    1. reduce one or more pains of your target market
    2. increase one or more gains of your target market
    3. have enough potential buyers to make it profitable (selling to mum and family only is not enough, unless very rich)

The book Value proposition offers great ways to dig into this topic.

Conclusion

Finding why you’re in business, whom you’re going to sell to and what you’re going to sell are the 3 initial steps toward a successful product launch.

Next step is to start building a business model, and this will be in another post.

Special offer to you, reader of this article

Don’t miss a  FREE  coaching session with Frank Contrepois to investigate the potential of your ideas

References

Credit: Image by erwyn

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