Why you probably mustn’t start a business with a new idea

Photo by Ines Álvarez Fdez on Unsplash

Studies show that up to 90% of new products fail. Even that big companies get it wrong. These are the companies with giant research and development budgets and the brightest minds. Their failure rate for new small businesses is about 90% in the first year. Entrepreneurs and start-up founders get it wrong too.

Developing a new idea requires you to start a new venture or small business. Many people who come up with a promising new business idea have never run their own business. This means that they have to learn how to firstly, develop a product or service which means commercialising it and secondly run a small business successfully.

Do you have what it takes to start and develop a new product or service from scratch and then run a successful venture?

To help you answer this question, let’s look at some basic requirements to successfully start and develop a new product or service:

1 Personal characteristics. You will need all the drive, ambition entrepreneurial skills, perseverance and patience to get a new product or service off the ground. Do yourself a favour and take a personal entrepreneurial test to see if you make the cut.
2 Business skills and experience. As I mentioned, commercialising a product or service idea eventually requires running a business. Do you know the difference between an income statement, balance sheet and cash flow statement? You will need to. Any business is hungry for cash and you need above everything else to know how to manage cash.
3 Marketing. Products or services don’t magically sell themselves. Someone needs the marketing and communications flay to get people interested in whatever you are selling and to convince them to buy. Even mediocre products can sell well through effective marketing. Just take a look around on the supermarket shelves and you’ll see that the “me-two” products are doing pretty well. Marketing requires knowledge of positioning, messaging, consumer or buyer psychology and behaviour as well as traditional and new media.

In taking your new business idea from mere concept, notion or thought to an actual prototype and then to commercialise it you will need to have experience in all find assistance with the following areas:

1 Developing new business ideas
2 The process for commercialising ideas
3 Financing the business idea
4 Implementing the business idea
5 Marketing your product/service/business
6 Running your business

Not many people have made developing the new business idea the speciality so it will be difficult to find adviser in this area, especially one that will lead you to successfully developing your product or service idea from concept to prototype and eventual product that will be distributed to different retail platforms. The other five areas I mentioned have many advisers but they will come with the large price ticket. Perhaps the most valuable will be in the marketing of your product or service or business because as I have mentioned products or services don’t sell themselves. With the correct marketing and selling of the benefits of a product or service, it can sell beyond expectations. Fans of the iPhone’s you early in the morning to buy the new iPhone when it is released each year.

If you are serious about taking your new business idea and developing it into a product or service and want to find out what’s required and how to go about doing it, then you need to get yourself a copy of “Breakthrough Ideas”. It will cost you far less than a consultation with a business adviser but will be priceless in helping you decide how to go about commercialising your promising new business idea. Get your copy here.

Wouldn’t it be nice if you could run your business like the post office

Closed without warning.
Closed without warning.

Without warning the Post Office in Sandton City shopping complex closed down in the first week of March. What happened is hard to decipher because the public messages outside were unclear and contradictory.

When the Post Office branch in the shopping centre closed down customers had to go to the branch in Benmore to collect their parcels or go to Bramley in Johannesburg to collect their post office box mail. Customers grumbled and left handwritten complaints on the signage at the post office branch.

I don’t want to get into any criticising of the Post Office but would rather look at its byzantine business model that is leaving money on the table for sharp private entrepreneurial business people. Continue reading “Wouldn’t it be nice if you could run your business like the post office”

Finding business opportunities through spotting work that others don’t want to do or find too hard to do

Kitchen (Photo credit: Wikipedia)

An immigrant came to South Africa and began to look around for work that other people found too difficult to do or didn’t want to do. He knew that if he could find this, there would be his big opportunity.

Instead of going for what was hot at the time or that most would-be business owners would think was an obvious thing to do, this entrepreneur looked around to find a hidden business opportunity.

If you were looking for a hidden business opportunity, where would you look? How would you go about finding a new business opportunity? Would you have the perseverance and determination to keep on looking until you came up with what would be a sure-fire moneymaker? Continue reading “Finding business opportunities through spotting work that others don’t want to do or find too hard to do”

Is time your only source of income?

Vienna Trip - Property, Finance & Investment a...
Vienna Trip – Property, Finance & Investment and Real Estate (Photo credit: Nottingham Trent University)

The other day I was talking to someone about a business opportunity and I said to the person that she was only selling her time. She looked at me puzzled. I explained that if you are selling your personal services to accompany whether it be to do a particular job, consulting, advising or training, you are only really selling the time that you have in life.

Look at it this way, people work in jobs for many years and hope to retire at 60 and that their investment of the time will bring them financial freedom, security and a comfortable lifestyle. Yet this is not always possible because the job market is uncertain and by the time that they retire inflation will steadily erode their retirement income. Continue reading “Is time your only source of income?”

Can imitation mean innovation?

I-5 Design & Manufacture | Continual Product I...
(Photo credit: I-5 Design & Manufacture)

With small business owners struggling in these recessionary times and many plunging into debt and being forced into bankruptcy, it would seem reckless to encourage new ideas for products and services.

Essentially, if you are going to start implementing new products and services, you’re in effect starting a new business. But then it can be said that when you pursue and secure a customer with any product or service you are actually in business.

Many people are being forced into creating a business of their own because of losing their jobs. This week we have seen how Pioneer Foods is retrenching 1,500 senior and middle managers, 10% of their 15,000 employee complement. Continue reading “Can imitation mean innovation?”

Do you have an idea for a small manufacturing business?

Eric Fredericks demonstrates the simplicity of Bigstep. Photo credit: The Editor, KZN Industrial & Business News and Eastern Cape Industrial Business News
Eric Fredericks demonstrates the simplicity of Bigstep. Photo credit: The Editor, KZN Industrial & Business News and Eastern Cape Industrial Business News

I was surprised to see almost no small manufacturers in a small business competition being run by a radio station in Johannesburg. Where are all the small manufacturing businesses? Why don’t small manufacturers enter these competitions?

Look, I’m not saying the entrants aren’t innovative but they mainly comprise service businesses. A household cleaning firm, gas servicing company, holistic massage salon, restaurant and financial adviser business all have their merit but what about the “real” economy of manufactured products?

No doubt we are in a service economy but without small manufacturing you don’t have the opportunity for exports and higher levels of job creation. How far do we want to go down the road of deindustrialisation? A developing country can’t go as far down that road as the UK has done. Continue reading “Do you have an idea for a small manufacturing business?”

How much do you know about the market for your product or service?

The Secret Garden
The Secret Garden (Photo credit: @Doug88888)

I love peanut butter. But I have to be very careful eating the stuff because it is so fattening. I really can only eat it about once every two weeks or so. If I eat more, I’m going to balloon.

The peanut butter market has not grown to its estimated potential size if you look back at the forecasts and expectations twenty years ago. Walk into any supermarket and you’ll see that the shelf space occupied by peanut butter has shrunk. Continue reading “How much do you know about the market for your product or service?”

Why you absolutely must innovate in a recession

Source: wikimedia commons
Source: wikimedia commons

What if I could write down a bunch of ideas for you on a piece of paper that would:

1) Get you more sales for your business in a recession
2) Increase your profits comfortably over your previous year
3) Cut the worry about your business you have most nights

Would you be interested?

Of course you would. And I’d be just as interested to see the look on your face.

But here’s the thing: Continue reading “Why you absolutely must innovate in a recession”

Is a biz-in-the box the right idea?

My home town featured recently in a Virgin Money flier. Always believed Kalk Bay had potential to be a star. Never crashed cars in Kalk Bay but brought boatloads of fish to the quayside for auctioning.

Off-the-shelf business opportunities (biz-ops) are springing up like Kalahari Desert truffles after the rainy season mainly because of the difficult economy.

The many biz-in-a-box options are so ubiquitous that it’s terribly confusing.

Take your pick: floor cleaning, carpet cleaning, custom engraving, website building and hosting, sports nutrition, vending wholesale computers and electronic products and roof repairs.

The list goes on and on…

Whatever you can think of there’s a ready-made business-in a-box with a DVD waiting for you.

But here’s the bottom-line:

Do you really want to buy a business system off the shelf?

Will it hold your interest and passion?

Will it bring in enough money to be more than a sideline business?

Another important question about these ready-made businesses is how well do they really work?

Continue reading “Is a biz-in-the box the right idea?”