If you want to build a house, you wouldn’t start by picking out curtains or installing windows, right? You’d start with the foundation. Yet, many entrepreneurs skip this crucial first step and jump straight into launching without performing market research or validating their business idea.
The entrepreneurial process involves a series of carefully planned steps to turn your ideas into successful businesses. This guide covers five essential steps to increase the chance of your success.
Ideation
Generating a business idea is the first step of the entrepreneurial process. When I decided to start a business, I explored several options to determine what kind of business I wanted using the same process that I’m about to tell you. Coming up with ideas is not as tough as you think. You just have to dedicate some time to brainstorm some ideas or do some research online, and you’ll find what you are looking for.
- What are your passions
What are you passionate about? Identifying your passions can guide you toward finding the right business idea for you. After all, starting a business is not just about making money, you need to be passionate about what you do. Start by brainstorming what you love to do, such as chatting with people, helping others, or singing, and think about what would make you feel excited every day.
- Identify your strengths
You might be good at something that doesn’t bring you joy. Start a business that leverages your skills and abilities to eliminate most of your competitors and you don’t have to spend as much time and effort to succeed compared to doing what you are inexperienced in. Don’t disregard your strengths just because they don’t ignite your enthusiasm, because they can bring you a huge fortune one day, and there’s a chance that you might enjoy them eventually.
- Identifying a problem
The lockdowns and restrictions during COVID-19 forced people to stay at home and limited their access to traditional dining experiences. This created a surge in demand for delivery services and companies like DoorDash, Instacart, and Uber Eats had unprecedented growth. Identifying opportunities that disguise problems can help you find a promising business idea.
- Find a gap in the market
Ben Francis was a fitness enthusiast at the age of 19. He was searching for some fitness wear online and found that the fitness wear at that time sucked. So he bought his own sewing machine and started Gymshark.
After finding some ideas, you have to narrow them down and pick one that is the most promising, below is how you do it.
Research and Analysis
Performing market research and analyzing your business ideas is essential for success. Through marketing research and analysis, you will have a better picture of the feasibility of your business idea.
Market research will help you validate your business idea, understand your competitors, identify your target audience, and product and service pricing, everything you need to figure out before launching your business. Many entrepreneurs are blindly optimistic about their business are never seek validation from the data, which leads to futile investment of their time and resources.
Planning
Imagine you are about to go on a three-day hike, you would plan your journey and prepare for the necessities you need on this trip. You will probably need a tent, sleeping bag, GPS, water, and food that can last for three days and you will have a detailed itinerary of your daily destinations. Just as a hike requires planning, so does a business.
Planning is important to guide your entrepreneurial journey, helps you estimate costs, identify risks, and create a contingency plan. It doesn’t have to be a complicated marketing plan, answering the following questions can help you create a basic business plan, and modify it according to your situation.
The Big Picture
- What is your business idea? (Describe your product or service.)
- What problem does your business solve? (What solution are you providing?)
- What is your mission statement? (What do you want to achieve?)
- What is your vision statement? (What does the future look like for your business?)
Your Customer
- Who is your target market? (Demographics, interests, needs, etc.)
- Why does your target audience choose you? (What is your unique selling proposition?)
- How will you reach your target market? (Marketing and advertising strategies)
Financials
- How much money do you need to get started? (Startup costs)
- How will you fund your business? (Personal savings, loans, investors, etc.)
- What are your estimated expenses? (Rent, utilities, marketing, salaries, etc.)
- When do you expect your business to become profitable?
Keep your business plan as clear and brief as possible to avoid information overload. Apart from that, your business plan may change along the way and it’s totally fine to revise it to make it more realistic.
Execution
Once you have a business idea and a business plan, start immediately. The longer you wait, the less likely you are to execute. Many entrepreneurs fail because of the following reasons.
Fear of Failure
If you don’t start, you will never fail, this is a wrong perception many have. If you don’t execute your plan, you have already failed before you even try. Failure is unavoidable and essential in your business, and it offers the most valuable lessons. Embrace failure and treat it as your friend that guides you towards success.
Perfectionism
Some entrepreneurs get caught up in trying to make everything perfect before they launch. However, Mark Zuckerberg once said, “If you’re not embarrassed by your first product release, you’ve released it too late”. In the business world, speed is important. The feedback you receive from your customers is way more valuable than your assumptions and guesswork. The quicker you launch, the more feedback you will receive, and the faster your product will evolve into the perfect fit for your target market.
Procrastination
Sometimes, people simply procrastinate because they don’t know where to start or feel overwhelmed by the obstacles are about to face. They may procrastinate through perpetual planning, which gives the illusion that they are moving towards their goal even though they are not making any progress. If you are stuck in this endless loop, it’s time to get out.
There is no secret to execution, you simply just have to start.
Scaling
Scaling is about doing the same thing, but bigger, better, and with more people. When you have a stable inflow of revenue, an expanding customer base, and well-defined operational systems, it’s time to consider scaling your business. This is where you start hiring other experts, training your management team and new employees, and introducing new products.
Scaling your business for the first time often requires help from experienced individuals such as mentors, consultants, and business coaches who have done it before. Bringing in investors who share the same vision is an excellent decision depending on what you want for your business. They are not only able to provide the capital but also the guidance to grow your business.
Conclusion
The entrepreneurial process isn’t a one-way street, it’s more of a repeated cycle where you’re constantly revisiting and refining each step as you grow. Understanding these essential steps and not taking shortcuts can avoid preventable failures.
