The adrenaline you get from coming up with a great business idea is unparalleled. You feel a rush of excitement as you start to consider the possibilities of your company taking off. Perhaps you feel like you’re onto something wonderful. But then you have to take those initial waves of thoughts and concepts and execute them. How do you even begin to make a startup idea something tangible? Where do you start?
There are several key steps you should take before you proceed with your idea. By being cautious, you ensure you don’t waste your time on a product or service that won’t do well on the market, or that you don’t get involved in something you don’t have the resources to start.
Think About The Why
Before you dive into starting a company, ask yourself why you want to launch this startup. Are you passionate about the business, or are you looking for a way to make money fast? The fact is, starting any business is difficult. When you think about the reasons for launching a startup, stop to ask yourself whether those reasons will be worth the hardships and challenges that come with building a company.
Create a Mind Map
Mind mapping is a powerful technique that helps you visualize your thoughts. This visual diagram allows you to outline everything you’re thinking around a central idea or concept. Essentially, when you create a mind map, you’re translating your thoughts into a picture that allows you to understand information better and faster. This expression of radiant thinking makes it easier for you to conceptualize your business idea.
At the focal point of your mind map is your central topic: your startup idea. The main themes of that central topic branch out from there, and continue to branch out until you form a cohesive, visual representation of your idea. This method allows you to group ideas together and build hierarchies that build a structure of what’s happening in your mind.
Research Your Market
One of the first steps you’ll need to make is conducting market research. Is the market ready for a product like yours? Does it need it? What are the chances you’ll generate revenue from this idea? Market research helps answer some very important questions early on. Don’t just focus on success stories—focus on why similar companies failed as well. Market research unveils things you didn’t know before, and instead of thinking of this as marketing expenses, you should think of it as an investment. Consider hiring a market research company or freelancer to gather reports and data in your industry.
Analyzing Your Competition
After you’ve researched your market, it’s time to start analyzing your competition. Even when you think you’ve come up with an original idea and that there are little to no competitors, chances are that there is some competition lurking out there. One of the most common mistakes new businesses make is not checking out their competitors.
First, make a list of your direct competitors. You can start with a simple search on Google for your product or service. Depending on your concept, you should be able to gather several players—however big or small—and peg them as your competition. You can take your research a step further by searching for similar startups using platforms like Crunchbase and AngelList. Then, turn to discussion forums on sites like Reddit to ask others how they’re currently solving the problem you hope to fix with your startup. Gathering real feedback from others makes it easy to identify what’s happening on the market today.
You should also consider who you’re competing with indirectly. Indirect competitors are those that offer slightly different products or services but still, edge into your industry or niche. For example, if you opened up a create-your-own sushi roll restaurant, you’d still be competing with the McDonalds down the street. Even though you offer wildly different cuisine, both companies still exist to satiate hunger. Think about both your direct and indirect competition to create an accurate picture of what you’re up against.
Think About Raising Funds
Once you’ve taken all the necessary steps towards validating your business idea, it’s time to think about how you’ll get the money to build it. In most cases, you aren’t sitting on a few thousand to start a company. Of course, you can bootstrap your company and take the “lean” approach to growth, but you’ll still need to invest time, and time is money. Consider bank loans, partnering with another company to offset costs, taking loans from the Small Business Administration, getting investments from friends, family, and investors, and crowdfunding.