What does it take to get your new business idea off the ground? How do you make your new business idea happen? How much is it going to cost?
The challenge about starting anything new – and I’m not talking about inventors here – is that you need to be fairly high up the food chain to make your new business idea into reality. What I mean by this? I mean that you need to have the skills, time, motivation, contacts and money to make your idea happen.
It may be different for a small kitchen table business where the budding entrepreneur makes jam preserves and sells the jars direct to a retail outlet, deli or farm stall. This is a relatively simple business model. But if you are going to manufacture a new type of lid for a jam jar you need a certain level of sophistication in your thinking. Now that might not mean that you have to have degrees in business, science or engineering but at least you should be able to deal with a research and development lab (if necessary), the factory that is going to manufacture your jam jar lid and know how to distribute your product through wholesale and retail outlets.
Whatever you wish to start, you are going to need some level of seed capital. You might be able to get seed capital from a grant, government small business institution or a private investor. Loans come with strings attached so you need to be careful what you’re committing yourself to and what you are being asked to give away.
This is why it is best to start early and begin to put away small sums that you can use to finance your business idea yourself. Even if you have to supplement your seed capital with a loan from someone else at least you have produced the amount of loan capital required. Small businesses don’t do enough loan planning before they start their business and as a result land up in financial difficulties before the end of their first year.
In developing your new business idea, you need to use your seed capital wisely. Suppliers, even specialised ones, will gladly take your hard-earned cash to do what you’ve asked them to do but are unlikely to point out a cheaper, more cost-effective way. Make sure that you spend your seed capital wisely because it’s unlikely that you’re going to get a second or third chance at developing and introducing your new business idea.
When your product is ready to roll out to potential customers, make sure that you have a workable plan to acquire new customers cost effectively. The more money that you throw at marketing, the higher your cost of customer acquisition will be. First take a look at the more cost-effective ways to market your products and services directly to potential customers rather than through middlemen who will shock you with the amount of money that they want to rake off your product or service. Look into distribution models and even experiment with distribution channels before you commit yourself to anything that is too expensive or that will limit your growth.
Making your idea happen is going to take everything you know and more to get it off the ground. Yes, a new business can be a sideline or part-time activity but you have to find the time to develop it otherwise it really won’t happen. We’ve heard it before from some of the top entrepreneurs who started out with very little: it takes 90% guts to get something off the ground and 10% capital. What they mean is that you, the entrepreneur, the risk taker, is the most important ingredient in getting a new business idea off the ground. It’s your perseverance, courage and passion that will ultimately decide on whether you will be successful or not.