Got a great business idea? – Now what?
If you had asked me 15 years ago how to start a business I would have said ‘write a business plan and take it to your bank’. Since then I have been advising entrepreneurs with a business idea not to write a business plan – at least not until they have validated their business model and got paying customers.
Why the big change in approach? Firstly the environment for investment has changed, banks don’t lend to people with a business idea – there’s too much risk. Private investors and angel investment groups have filled the gap and they have different expectations. They invest in a person or team and they want the entrepreneur to identify and mitigate the major risks. Usually the biggest risk is - will there be paying customers and how many?
Secondly, we know a lot more about how to increase the success rates of startups. Startup failures are substantially less when new LEAN and agile methodologies are used by the entrepreneur. These methods take a systematic approach to developing the business idea by breaking down the assumptions, developing hypotheses and validating them. A commonly used tool is the Business Model Canvas which helps to scope all aspects of the business in preparation for validating the business model.
Thirdly, there is a lot more help available now for startup founders. Experienced entrepreneurs, mentors, investors, government agencies, incubators and accelerators are all ready and willing to help a new startup to succeed. With the development of Social Media, cloud computing, and new software there are many affordable services to help new startups.
Finally, the world is changing at a rapid pace so entrepreneurs must adopt a more flexible and dynamic approach to planning. A business plan could be out of date by the time it is written due to changes in technology, new products, market trends and changing customer needs. An entrepreneur must be anticipating changes and be ready to modify (or pivot) their business model in response.
So you’ve got a great business idea – now go get some help.
The first hurdle for many aspiring entrepreneurs is often seeking help and being prepared to talk to others about their idea. Today there is no excuse – as Nike says – Just do it!.
If you would like expert advice on developing your business idea in a hands on workshop then register now for a Startup 20/20 Workshop here.