Just because we are in a recession, it doesn’t mean that now is not the right time to start a business. Recessions give birth to some great businesses; Fedex, Burger King, Microsoft, GE and CNN were all started during recessions.
If a need exists for the product or service that you are selling, then the market will determine it’s success. Offering the right product at the right price is just as true in a recession as it is in boom times.
Whilst some may regard access to funding as a barrier to starting a business, it’s much better to start a business with a great idea and little money than with lots of money and a lousy idea. This is because nothing focuses the mind more than having to make a return and having to earn enough money to pay the bills. Out of necessity you’ll have to ship quicker and have a much smaller cost base from the get go.
This is a new series of posts on creating a start up business.
This is Day 1: Developing Your Idea
If this is your first business, now is the time to be unoriginal. That’s not to say copy someone else’s idea, but if you are entering a market which already has similar products or services, you already know that a market exists for you product or service.
When you enter a market where competition already exists, your product or service needs to be better than the competition, which means that it’s either got to be cheaper, better quality or offer some other sustainable benefit over and above the competition.
When you enter a new market with a new product or service, you’ve got to spend time educating people about what your product or services does/offers. In a downturn, if there is no compelling need for your product, ie it doesn’t scratch your potential customer’s itch, then you won’t sell it.
So unless it’s immediately obvious what your product or service does, you’re going to be spending a lot of time (and money) educating potential customers, which will burn your cash and make it much harder for you to make a return.
Blockbusters come later
If you have an idea for a new blockbuster product, then make that your second or third product launch as your first product will provide you the cash flow to fund the development of your idea.
What are you good at?
Start with a blank sheet of paper and fold it down the middle. On one side list all the things you think you’re good at and like to do; eg working with people, coming up with innovative ideas, good at sales etc. On the other side list all the things you aren’t so good at or don’t like doing, for example, coming up with ideas, working with others, working with children etc.
The key here is not to over think it, just jot down the things that immediately spring to mind.
What’s your problem?
Now, think about all the problems in your personal life, what would make your life easier? What frustrates you?
After you’ve listed down these items turn your attention to your business life. What would make your life easier? If you’re already in work think about what you like and dislike about your current job.
Get the juices flowing
Now think about the lists you’ve created above of the things in your personal life and think of 4/5 products or services which would make your life easier. Do the same with the business list so you’ve got around 10 potential opportunities in total.
Are there any products or services you’d like to offer and have the skills to do?
Think about this
In 1999 Reed Hastings got a $40 fine for returning his video late. But instead of getting mad, he got inspired. He thought why can’t the video rental market be more like the health club market where you pay a monthly fee? Out of his frustration bore Netflix.
What about you?