Starting a new business can be daunting. One of the biggest obstacles stopping people starting up is the fear of failure but questioning your business idea is also a vital part of determining whether or not it is likely to succeed.
According to Janice Pittis, director of VentureNavigator, entrepreneurs thinking of starting up a business have to find the balance between feeling the fear but having the confidence to launch a venture anyway.
"It's all about understanding if your idea is a good one and how you can improve your chances of success," she says. "Essentially, you need take your idea for a road test before you take the plunge and commit time and money."
VentureNavigator offers the following tips to help you understand if your idea is a winner:
Understand your goals
Identify how close you are to ‘starting-up'? Is it just an
idea, or is there a bit more meat on the bones? Your personal goals and
attitude to risk will determine your progress. Do you want to forgo salary to
get things started, get more time with your family or take over the world?
Is there a market?
It's all about customers. Without customers, there is no
business. If no one wants what you have to offer, your venture will fail very
quickly. Spend time determining exactly who your early customers are going to
be and how you plan to reach them.
Market research
After investing time and effort into an idea, it is
important to know whether the opportunity is a substantial one. A thorough
understanding of the market as a whole is required, as is an appreciation of
where that market is heading.
Industry insight
It's generally better to compete in an industry in which
most participants are successful and profitable, rather than in industries
where many businesses struggle to survive.
Your industry consists of other businesses with goods or services that meet the kinds of customer needs that you hope to satisfy. To excel you must identify threats from the principal competitors. This will also help you focus on what makes your business different.
Also, think about the broader aspects of the industry: could substitute products, disruptive technologies or other external circumstances influence your chances of success?
Competitive advantage
Do you have a sustainable advantages over your rivals? Put
another way, it is all very well to be the first in a market, but if you're
actually not very good, then sooner or later someone will come along who is.
Examine the financial status of your business and forecast financial goals for
the first year.
Critical success
factors
As the owner of a start-up business, you will have competing
claims on your time and resources. Identify the critical success factors for
your business. These are processes or decisions which, if done correctly, have
a disproportionately positive effect on your business or which, done wrong,
will negatively impact your business regardless of performance in other areas.
You can now prioritise what needs to be done first and what you can ignore for
now.
Key contacts
Your connections matter. Connections up, down and across the
value chain are important for a variety of reasons. Your connections with
potential customers, especially large or strategically significant ones,
enhance the likelihood that you will meet its revenue targets. Connections up
the value chain, with suppliers, enhance the likelihood that your will be able
to obtain the inputs you need at favourable costs and terms. Connections across
your industry will enhance your understanding of the competitive landscape,
helping you differentiate and position your products to stand you apart from
your competitors.
For more information visit www.venturenavigator.co.uk
