Years ago I noticed business incubators had become all the rage. The truth is this idea has been around since the 1980s, and some say we are in a 3rd generation of helping entrepreneurs grow their business, using a model that offers support. The support isn’t free, (of course) but then the payoff should be well worth the costs. But before you incubate a business, you need some ideas that have gone from seeds to sprouts.
This week we’ll look at business ideas: how to get some, how to do the research to see what is realistic, and how to protect them until they sprout. Once you’ve narrowed down to your best ideas, then you’ll have something to incubate.
New business ideas come easily for some. These creative types may have several ideas a week! Often you hear about the latest spark of inspiration at a BBQ, at lunch, at the “water cooler”. Many people love to share ideas because they aren’t planning to act on them.
Others struggle to find any good ideas for a business. They research what they know, what they are interested in, and all the work of spinning up. But before any one good idea takes hold, many, many ideas may be shot down.
It’s frustrating for the serious entrepreneur to have an idea, chase it down, and have it fall apart for some reason. In another post, we’ll explore reasons why a business idea fails. The reason you want to generate several good ideas is so you can work through to the best one to chase first!
Coming up with ideas is something we can learn and so is learning how to do the research. Let’s start with generating ideas.
A quick look at online resources shows that plenty of folks want to give you ideas. Kind of like that guy at the party who has a million ideas, and no implementation game. Better than what someone else has thought of, (and probably shared with a million others) is knowing what you like to do. For some, it’s working with people directly, for others, it’s solving problems. Accountants like numbers and the stories they tell. Makers literally want to make things, as do construction workers, engineers, and those in culinary fields. So where do you “lose track of time”?
Next, what are you good at, or can become skilled at, in a relatively short period of time. Nothing against the long game but sometimes we don’t have decades to get good at something complex. Once you start on a path, you’ll probably have a life long learning curve anyway, so cultivate patience, a trait you’ll need to be a good business owner.
Two key ingredients down: motivation and ability. If you have more than one idea brewing, based on the first two steps, hang onto them. The next step is looking at opportunity. You’ll need to be able to generate income AND a profit. Income (or revenue) alone is not enough.
Opportunity can be more difficult to nail down. It means knowing who buys that service or product, or would buy it (if you are creating something entirely new), who makes it, how much it costs to create it and get it to your customers, and what kind of competition you’d face in the market. You’ll need to have an idea of how much you’ll need to sell to break even, and what “break even” means, in detail [see future blog post on how to find your break even point]. You’ll also need to know if you can start this business on your own, or you’ll need investors [more on these details later too!].
If you are creating a new product or service, you’ll need the research on how it can be produced at the volumes you need. Trust me the folks who based cell phone batteries on lithium could have had a little foresight.
Once you’ve clearly defined your parameters around “opportunity”, you’ll have to make some decisions. Is this the idea you want to develop, or test market? Is there another idea that seems more viable, sustainable or with higher growth potential? Does a great idea seem like more work than you can put into it? These are all fair assessments, and for every great idea, there are people out there thinking about them too. So if the corner yogurt stand was something you started in the 1980s, you were cutting edge. Now? That market is probably saturated… but maybe not where you are.
Within a great idea, don’t forget, can be a tweak that makes your company great. For instance, specialty ice cream stands, with delightful flavors, like cheesecake lemon, can do great in a small, local market.
Remember, your goal is an idea you can make real. An incubator, after all, protects eggs during gestation. You want to protect your idea against naysayers, while you work out the details. If it doesn’t come to fruition, you won’t be that guy at the party, spewing “great” ideas without the real moxie of an entrepreneur. So figure out what you want, and work with like-minded folks to make it happen. Don’t talk about it, be about it.
Not every idea can be as meteoric as pet rocks, but with determination, some skill and luck, you can build something that lasts for decades, or even generations.