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How to turn a great idea into a profitable business

By QuickBooks:

We live in an entrepreneurial time and an entrepreneurial country and because of this, there are lots of new businesses being started all the time.  But, lets face it, not every great idea is guaranteed to turn into a great business. Depending on what the idea is, you often find that a lot of time is spent on the design, creating a prototype, getting the patents together and figuring out how to manufacture it. Even if the entrepreneur does research to understand the category and gain an understanding of the technology and the market in which they are going to operate, they still need to remember that they are completely starting from scratch in terms of actually taking what they’ve done so far and turning it into a real business.

This is the norm, rather than the exception, with start-ups. It’s human nature to get immediately excited about a great new idea, but the simple belief that, “If you build it, they will come,” is not the way any new idea becomes successful.   A new idea becomes successful by way of hard work and planning.

A few key steps are absolutely critical to any successful launch:

  1. Create a business plan

No matter how many articles you read on entrepreneurship, the one thing that they all agree on is that to start a business that is going to succeed, you need to write a business plan.  Lets face it, this isn’t fun, but it’s one of the single most important things you must do to stop dreaming and start making your business idea a reality. A well thought out business plan forces you to consider all aspects of business operations that will be necessary for success, including production, distribution and marketing. Without one, no investor will even consider providing you with the capital you need to become successful, in fact, you’ll have no real way of even knowing just how much capital you’re going to need. Check our Blog archives, there is a great article on how to write a one-page business plan. (link to that blog article)

  1. It’s all about the doing

Think about how many amazing ideas die on the vine. Great ideas are only great if they’re well executed. This has far less to do with the actual product than with the more mundane elements of finance, marketing, sales, production, etc. Failure to consider all of these critical elements upfront means that success is unlikely. Which brings us back to why investors first want to see that business plan.

  1. Define your promise.

You really need to understand your brand and In ten words or less, describe why someone would want your product. When put to this test, most entrepreneurs immediately dive into the detailed minutiae of product design and functionality. That’s not what people are looking for, they are looking for that reason for being, the simple truth of why the offering is different – People want to get excited about the potential your product has, not bored by all the details.

  1. Distribution matters… A LOT.

Don’t underestimate the importance of distribution.  This part of a business can make or break you.  Between fighting for shelf space, marketing fees, promotional fees and distributor fees, as a new kid on the block you might find yourself spending more than the value of the product just to put it on the shelf. Do your homework.  Understanding where to sell your product, and how to effectively enter those channels is one of the single most important aspects of any business.

  1. Package things simply

The old adage of KISS (Keep it Simple Stupid) is never more true than in the process of taking an idea and turning it into a business.  Obviously, the planning is essential as stated above and you most certainly need a business plan or roadmap for your endeavour, but less can certainly be more. The best advice is to put together an easy-to-review presentation that walks through the basics. Keep it top-line, and be prepared to walk anyone through it in 10 minutes or less. I said anyone–because you should go in assuming your audience knows very little about your product or category.

  1. Leverage your network.

You have friends and family. You’ve worked with people who respect you. Many of them can offer expertise, networks and occasionally, investment potential. Often, they would love to help, that is, if only you would ask. Not all will, of course. Often, the ones who help the most are those you originally expected the least from. Don’t be afraid to engage the people you know, and be prepared not just to share your idea but to express the ways they can add value.

  1. Most of all, keep trying.

Don’t forget that starting any new business is going to be a challenge and that turning an idea into a real functioning, money generating endeavour takes a whole lot of commitment, time and determination.  Never give up.  Learn from your mistakes and use the learning.

  1. Remember nothing is forever.

When you finally get that great idea to develop into a profit-generating business, innovate, design new products, extend your line, and stay current. There is a life cycle to everything.  One product will not build a business. One product is a start. Keep building your network of retailers, keep giving them products that are new and current. Never, ever stop.

The bottom line is that everyone has great ideas.  Few act on them. Even fewer make money from them.  What you can be sure of though, is that a great idea is not a great idea until you try.