Think carefully before choosing the business idea
Choosing the business idea is the most important part of the pre start up process. Many persons do not spend much time in choosing the business idea but rush quickly into the preparation of the business plan. You have to be sure of what business you want to get into, before you plan how!
While I worked at a certain business services company in Trinidad and Tobago, it was my duty to interface with potential entrepreneurs. Together the client and I would review her ideas about getting started in business and develop a suitable plan to approach lenders. Occasionally someone would approach me, having recently come into substantial funds, and ask what business he/she should get into. On such occasions I often thought of suggesting: “Open a house of pleasure”. That was always sure to shock!
You see, the decision “What business to get into?” is not one for others to answer. Advisers may help, but the decision is yours in the end. Deciding on your business idea is a crucial first step on the road to entrepreneurship. If the idea is not decided well, a business plan, however well-constructed, may not deliver the desired results.
Steps One in choosing the right business idea- Business idea generation
• Assess the extent to which you possess the typical characteristics of successful entrepreneurs and how well you’ve developed the skills that they use to start and grow their ventures. Unlike characteristics, skills can be acquired through training or by hiring people who have the ones you lack.
• Identify your Strengths –skills & talents, capabilities, training & experience, business exposure, good products/services, funding, loyal customers, machinery, equipment, location.
• Know your Weaknesses – lack of critical skills, poor quality goods, poor customer service, no/limited funding, poor marketing
• Determine what Threatens your success? – competition, increased taxes, crime, etc.
• Recognize the Opportunities for your entry into business– emerging markets, government subsidies.
• Other options:
o Study your hobbies and see if any business idea can come from them
o Think of subjects done at school/ books read/ that can be turned into a business e.g. home economics, dress making, art
o Observe what persons around you buy, like, dislike, need –community requirements
o Check out new products/services – determine what is selling and whether it is seasonal/all year round/ where persons go for the products etc.
o Check for business ideas in internet sources, yellow pages, newspapers, business directories of libraries, magazines
o Talk to small business agencies etc about possible businesses that you can get into.
Step two in choosing the business idea – Review Business Options
The following are a listing of possible ways of getting into business:
• Manufacture a product
• Distribution – sell things from a van and or deliver to shops etc,
• Provide a service e.g. Painting houses
• Look at possible ways of changing/modifying existing products to improve them – change their colour, shape, weight e.g. putting flour in smaller packs, bulk purchasing sweets etc and placing them in small packages for children
• Do repairs of machines, equipment
• Provide maintenance services e.g service equipment in buildings in the community
• Replacement of designer and other items by providing cheaper substitutes. This is often done in the garment industry
• Adding of features- to help one to be able to do more with existing products
• Buying an existing Business
• Find Uses For Waste Materials and disposal of waste material
• Assemble A Product
Step Three in choosing the business idea –Evaluating the business ideas
Make a short list of business ideas. Next, for each idea that is considered, determine/ consider whether the business will be in trading, manufacturing, services or spin –off e.g. modifying/changing existing products. Now write short and precise description of the proposed business in terms of
• Which needs will the business attempt to satisfy?
• What products/services will it sell to satisfy those needs?
• Who will be the customers that have the needs that the business will satisfy?
• How does the business propose to sell the products/services to the target customers
• Is there support for the business idea from my family, is there a support team, do I have or can acquire needed competences
Step Four in choosing the business idea – choose a business idea based on the relevant criteria
Finally, using the following criteria chose one business idea that is the most promising for:
1. –Realism and practicability
2. –Marketability of product/service- will persons keep buying/using it
3. –Best fit (into your life/plans/competencies)-
4. –Risk level
5. –Sustainability- can it stand the test of time?
Step Five in choosing the business idea – Testing and refining the business model
Test your business model with a sample of prospective customers, and refine it based on feedback from them.
When you are satisfied that you have chosen well:
Refine your description of the chosen idea in terms of: Which? What? Who? How?
Revisit the SWOT Analysis- Determine how you will Improve your strengths; rise above and counter your weaknesses; grasp the opportunities you see; defend your business against all threats
Step six in choosing the business idea – Determining initial Start Up requirements
Set realistic time lines for all the steps you must take to get the business started- Check Starting a business in Trinidad and Tobago
1. –Required training and guidance
2. –Business registration
3. –BIR, NIB registration
Only now, are you ready to prepare your Business and Marketing Plan and source the necessary funding and other essential requirements – Check US Small Business Administration – 9 steps to Starting a Business.
With your plan complete and funding in place: Commit to Your own Success – Follow the Plan. TTBizLink and Ease of doing Business inTrinidad and Tobago provide information on doing business in Trinidad and Tobago.
For help with doing the assessment that will inform the decision of which business to go into there is an upcoming training programme. You can leave contact information and indicate your interest in attending this session. You can also check us for a free twenty minute on line consultation. Please read why-entrepreneurs-should-choose-ffts/