This article is the first part in a series where we will help you to develop a road map towards turning your idea into a reality.
Like many others, you have a brilliant idea for a business; however, you aren’t sure how to make it a reality. Below is a checklist that contains a few points that you need to consider before you dive in head first.
What problem does your product aim to solve?
This one is likely the most important question that you should be able to answer before you start your business. Now, by ‘product’, I don’t necessarily mean just a physical product; it may be a physical product, a service, a place, etc. Whatever your product is, it should aim to solve a problem that someone has; the extent of the problem is what is going to drive demand.
For example, you don’t go to Bunnings to buy a drill; you go to Bunnings because you need to make a hole in the wall. The drill is just the tool you use to do so.
Knowing how your product helps its target audience solve a problem gives you a big step forward when it comes to building your marketing campaign to sell your product. Once you think you have this answered, get together with a group of friends or a network of fellow entrepreneurs and get them to pull apart your thought process and brainstorm ideas around where they think your product works and doesn’t work. If your idea gets torn down, don’t take it to heart. Use that criticism to build on the product and learn from the experience. It’s much better to find these things out now rather than find out from consumers via social media after you launch.
Describe your business
This is another exercise that is beneficial to be performed with a group of friends or your entrepreneur network. Let me take this moment to say that having a good network of smart, savvy entrepreneurs that you can meet with regularly to brainstorm and problem solve, is an extremely important asset that you should find if you don’t already have one.
Now, describe your entire business model to this group and ask them to play devil’s advocate. Treat this exercise as though you are pitching to potential investors, where your group or network are the investors.
Questions to consider and answer:
- What is your idea?
- Who is your target demographic?
- Where is your revenue going to come from? i.e. How will you monetise your idea? What are your sales projections over the first two years? What level of sales do you require to break even?
- What are the barriers to your idea being successful? How will you address and overcome these barriers?
- Who are your competitors and leaders in your market-space? What are they doing right and in what areas are they lacking? How can you learn from this? How can you exploit the areas where they are weak?
- Are there any complimentary businesses that share your target demographic, have a product that compliments your’s, but aren’t your competition? How can you develop strategic relationships with these businesses?
- How are you going to market your idea – where are your customers going to come from? Are you going to leverage social media? If so, do you have a social media strategy?
I’ll touch on corporate structure quickly, but strongly recommend you also discuss this with your accountant before making a final decision. There is no ‘one option is the best option’ when it comes to corporate structure. The most popular options in Australia are a Pty Ltd Company, a trust, a partnership, or a sole trader.
Some things you may want to consider:
- Projected turnover and profit. Different structures have different tax rates and obligations so having a rough idea of what your expected turnover and profit will be will help you make the right decision now rather than having to make changes at a later date.
- Is your structure open to future investors? If, now or in the future, you want to take on new investors or partners, does your structure easily allow you to do so?
- Asset protection. If you have other assets, talk to your accountant about whether the setup minimises any potential risk to your other assets.
Your business name will be what you’re known as and will be the centre of your marketing and branding. All your communications will have it written on it and your customers will use it when recommending or talking about your product. Because of this it is quite important to get it right the first time as it’s not always easy or advisable to change your name after a few years of operation.
Here are some things you should consider when choosing your business name:
- Is it memorable? Your customers and advertising targets need to be able to remember your name easily. In most cases, this means keeping it as short as possible – business names with 4 or 5 words to them are harder to remember than names that use just one word.
What are the names of five businesses you remember? Google. Apple. McDonalds. Coke. Nike.
- Does the name describe too specifically what you do? If, in the future, you want to expand into a new market space, will your proposed name create a barrier to entry to that market?
- Your name doesn’t have to describe what you do. Memorable is more important than descriptive. Your marketing campaign will tell people what you do and why you do it.
- How does your proposed name fit in with your target demographic? For example, would you call your new vegan restaurant ‘Green Steakhouse’? No, because your target audience will be unlikely to consider dining there. Whereas a name such as ‘The Vegan Kitchen’ will increase its chances of success in that market space straight away.
- Is the name available on all platforms that you wish to use?
Search the ASIC database to see if your business name is available for registration.
Is the URL available in multiple top level extensions? ie .com .com.au .net etc
Is the name available on social media platforms?
- Do you plan on trading internationally? If so, how does your proposed name translate in different languages?
That should give you a strong starting point; lots of information to consider and research and a lot of questions for you to ask yourself and your team. Stay tuned for the second part in this series which will cover some of the next steps in getting started. In the mean time, if you require any assistance or have any questions, feel welcome to contact me via our contact page.