I have been known to be the Business Coach that tend to rip apart many ideas from business owners. It pains me to do so, but I believe that many of the business owners that I have met are really deluded about things. They always talk about chasing their dreams, but in due course, many of their ideas have turned into a nightmare.
Many will say," What right have you to rip apart their ideas?" Well, I do not rip them apart, I ensure that they themselves do the ripping. What I do is to ensure they think through their business ideas and do not fall in love with it too easily. You see, good ideas rarely make good businesses. Each of the 90% of the start-ups that fail within the first few years would have brag about their great business idea. Look at the patent office. There are plenty of ideas there and I can be very sure that many of them have not brought in the moolah for their registered owners.
So, here are a few tips:
1. Why others are not doing it?
Just because others are not doing it, that does not mean that your idea is unique. Quite a number of whom I have coached and trained tend to offer products or services that is not offered by others. They say that they are unique and they know it is their Unique Selling Proposition. However, more often that not, many of their competitors have already looked at the product or service offering and realised that it is not commercially feasible at that present moment. Not many know this, but timing is one of the key factors when you want to launch a particular product.
2. Who is my product or service is for?
I love to ask this question. And this would differentiate between the rookie and seasoned entrepreneur. The rookie would exclaim proudly that his product is for everyone, whereas the seasoned one would have clearly an avatar etched in his mind of whom his target customers are.
3. How much would you sell it for?
The price point is another factor that needs to be considered. The rookies would come in and offer themselves to be the cheapest, thinking that is how they would get the sales. Unfortunately, this strategy is one of the most counter productive in the long run and will only kill their own business. The market rate is one of the best to price your products. Do not be a hero. In the business world, heroes die first.
4. What is the critical number?
What do I mean by critical number? It is the number of sales needed to ensure that you can continue to build your business. I will give you a simple example. Let's just say that in order to maintain your current lifestyle, you need a profit of $5000 per month to ensure you have money for your business as well as for your salary. The profit margin for each product that you sell is roughly $20. You then will realise that you need to sell 250 pieces of your product each month. The funny thing is many believe that they are able to hit the target. Many of them who says so do not have any online platform, nor marketing skills, nor many distribution channels. Talk about wishful thinking..
5. What are the real costs?
You need to really understand your costs. It will not be very clear in the beginning due to the lack of experience. Therefore it is really important for you to have a mentor who knows your industry or an experienced coach who would be able to guide you along. Your failure to really understand about your actual or real costs would be one the reasons for failure.
I hope those 5 points would help you relook your business idea. Power ON!