'I want to start my own business but I have lots of different ideas and don't know which one to choose!' Does this sound like you? If so, you are not alone. This is a statement we hear a lot at the Centre for Student Entrepreneurship and our 5 step approach should help you to choose the business idea that is right for you.
1. 'Never settle for less than butterflies'
OK, we know it's cheesy but this well-cited piece of relationship advice from Carrie Bradshaw (Sex and the City) applies to business to. One of the main reasons for starting a business is to do something you love, something that you're passionate about. If you have lots of business ideas floating around this should be your first step to filtering out the gems from the non-starters.
Which of the ideas gives you butterflies? In other words which idea gets you excited? Which one makes you want to leap out of bed each day? Starting a business is a huge commitment and you will inevitably invest a huge amount of time working on your business, especially in the early stages. We're not here to try and tell you that every part of running a business is fun (tax returns anybody?) but the core essence of your business, its raison d'etre needs to be something that you're excited and passionate about.
Not only will this make you happier in your work it will also mean you're more likely to succeed. People don't buy products and services from businesses – they buy them from people and if you're passionate about your idea people will want to do business with you. You can learn the other skills that you need to run a business but you can't fake passion.
2. 'Show me the money'
Being in business isn't all about making money. There are a huge number of reasons why people opt for self-employment – freedom, flexible working hours, the opportunity to do something that they love (see point 1 above). Ultimately though, we all have to pay the bills. A good way to whittle down your list of potential businesses is to consider how you could make money from each of them. If you can't answer that question for any of your ideas – cross them off the list or revaluate them to see if there is an income stream that you haven't considered. If you can't find one then what you have is a hobby rather than a potential business. Focus on the ideas that will make a decent return on investment (or at least enough for you to earn a living!).
3. 'Look for the bare necessities'
What are the key resources that you need to get the idea off the ground? Do you have them or can you acquire them? Some businesses such as restaurants will require a huge number of resources such as premises, people, equipment and stock. If you don't have the money to buy the bare essentials that you need to start your business then you may have to reconsider it. This doesn't mean giving up on your dream but it may mean scaling back your idea and focussing on growing it organically (jargon for starting with few resources and growing the business over time). For example if your dream is to run a fashion boutique, you could start by running an online retail business until you save enough money to buy the premises you need.
4. Got skills?
We all have our strengths and weaknesses. Before choosing one business idea to pursue you need to consider yours and how they match with your idea. Let's say you have a great idea to establish a Michelin Star gourmet restaurant but you struggle to make beans on toast – you see the problem here? This is an extreme example of course but if you're considering more than one business idea the best thing you can do is play to your strengths and pick the business that you know you could run. If you're a dab hand at designing and/or making things; choose a business that allows you to use your creativity. If you're a suitably qualified fitness fanatic, consider being a freelance fitness instructor.
Ultimately make sure you have the skills you need to make your business a success. Of course no one is saying that you have to be a whizz-kid at every aspect of running a business from building your website to keeping your accounts in order. You can buy in skills where needed but make sure that you have the skills you need for your core business idea.
5. Will it work?
This sounds obvious right? So you've gone through your list of potential money-makers. You've crossed off those that didn't give you butterflies. You've considered how you could make money from them and you know that you have the skills and resources you need to make your chosen idea a success. The final step is to consider whether this idea will actually work. In other words is there a market for your product or service? Are people willing to pay for it? Is there enough demand to cover your costs and make a profit?
How do you find out all this? By asking people of course. Remember friends and family will typically tell you what you want to hear so make sure you find some real potential customers. Set up a focus group, carry out a survey – do whatever you can to establish whether this idea will work.
You'll also need to consider your competitors. Is there anyone else offering the same product/service as you? If not is there a reason for this (has someone else tried this before)? If you have competitors, how many are there? Is there space for you in the market? Can you offer something that they can't? Find out as much as you can about your potential competitors by visiting their websites, reading their marketing materials and mystery shopping – call them or visit them and see what their service is like. Then you can focus on making yours better.
Once you have worked through these five stages you should have a much clearer view on which idea is the best one for you to follow. Just remember; play to your strengths, consider the resources needed, make sure it's a money-maker, consider the market and competitors and above all else – make sure you're passionate about the idea. We spend a large part of our day at work, so you want to make sure that time is filled with doing something that you love. OK, so now you have chosen your business idea – get out there and make it happen! Good luck! Blog post by Lauren Davies, Entrepreneurship Coordinator