What NOT to do When Starting a New Business
by Angel Padulo, Co-Founder investHER Academy
So you want to start a business or have an innovative idea. The first and most important word of advice: do your RESEARCH. As an entrepreneur and business owner I know how exhilarating it can feel when a new idea emerges in my head, but one thing I tend to forget is that my idea may not be one that others are willing to pay for. Investigating whether there’s a sufficient market for your concept will save you lots of time, money and energy, oh and did I mention money… And asking your friends & family what they think of your idea doesn’t count, as their answers will most certainly be biased, one way or another.
Say, for example, you have just invented a bubble gum maker for your home countertop that also makes licorice. You cannot wait to build your gadget and share it with the world. Maybe the world won’t be so enamored, or maybe your invention will be the best thing since sliced bread. Where do you start? Send out surveys to non-friends to collect your data. Be sure to explain some of the following:
- How does your product work/what is it?
- How much does it cost?
- What’s in it for the consumer?
The biggest mistake entrepreneurs make is that they fail to solve the customer’s pain. Is there a true need for the product or service? What would be the benefit of me having a countertop bubble gum/licorice maker? Can’t I easily just go buy a pack of gum and not take up more counter space in my kitchen? As a consumer, those are the first thoughts that would pop into my head.
This process of elimination also applies to existing business concepts. You want to open a candle store, but one already exists in your neighborhood. So what makes you think your store will attract more customers and why? These are the hard questions you need to ask.
Please don’t go apply for a small business loan, sign a one year lease on a retail space, build a website, hire employees, etc. until you understand what your prospective customers really need or want. What do they currently like about the already existing candle store and what do they not like?
Once you have all your answers you will know whether you should proceed. The rule of thumb is, if you get answers from at least 50 potential customers (not your friends) and at least half of them indicate an eagerness to buy your product/service, then you may proceed. Otherwise, it’s time to take another nap and dream up a better concept.
To learn more about entrepreneurship and how to invest your money to grow your wealth for generations to come, visit me at investheracademy.com