How to turn your business idea into a gold mine

Do you have an idea for a business? Have you already thought about turning this idea into reality and cash? Then the first step is to determine if the idea is even worth pursuing in the first place.

Many people have great ideas. There’s a lot of truth in the old maxim, “ideas are a dime a dozen.” While success in business may start with a good idea, it’s the hard work involved in building the dream that will produce a payoff.

To get partners and investors, you must build a business case. Unless you can fund it all by yourself.

Here are some questions you should ask yourself when you want to make sure that it makes sense to start a new venture.

The Business Case

Preparing a written Business Case or Business Opportunity Document as it is sometimes called is a preamble to a far more detailed Business Plan. It helps you – first and foremost – convince yourself that your idea is worth pursuing and, if you have more than one great idea, it helps you determine which one is most deserving of your time and effort.

In summary, making the Business Case  comes down to three essential tasks: 1) identifying customers and why they will buy whatever it is you are offering, 2) identifying the capital or other resources required to achieve sales and be viable and 3) showing how much money the business will – or can – make over time!

How big?

Looking around at the corporate landscape, you will see a proliferation of small companies. Most will remain small. Some will grow and become global enterprises employing thousands of people. How big will your company become? That’s really up to you and how ambitious you are. Are you content with running what’s referred to as a “lifestyle” business? That’s one with relatively few employees, likely no investors other than the founders and operators, sustainable revenues and enough profit for a very comfortable lifestyle.

What about an early exit? Build it fast to sell it and cash in. That’s the goal of many start-ups especially those that are externally financed.

Who is your audience?

Most often, a Business Case document is prepared to attract investors. It can also be used to attract employees or partners to work on building the business. First and foremost, though, it should be for you so that you are prepared to commit the many hours of hard work required to prepare a detailed plan and then begin the task of building the business into a successful venture.

You can also use it as a tool to get initial feedback from your peers, friends, business associates and others whom you trust and who are willing to listen to you.

Odds of failing

The reality in business is that the majority of companies will fail within their first five years. Of those that make it past the first five years, more than half will fail in their second five years.

So why do so many businesses fail? The most commonly stated reason is a lack of financial capital. This is a cop-out. Think about it: with unlimited funding, you’ll never fail, right? If a business has a good plan and good management, it will be able to raise the necessary capital. The real reason for most business failures is the inability of management to execute the business plan.  There’s no shortage of capital.

Good management, however, starts by asking, “is the business idea viable in the first instance”? This is why making the Business Case first is so important. Preparing a Business Case will at least help you sort out good ideas from those that are flawed from the beginning.

Have you got what it takes?

Making money in business is not a result of having a good idea or even a comprehensive business plan. It takes entrepreneurship and sound management to make money. Are you an entrepreneur? Is this an innate ability or can you learn it? What if you have no experience whatsoever, can you still start and grow into a huge business? Well, Steve Jobs, Richard Branson, Michael Dell, Bill Gates, Sergey Brin and Mike Lazaridis all did it without having any prior business experience!

You can be a millionaire!

Yes, you can be a millionaire. The really cool thing about starting a company is that you can become rich by creating your own playing field. In business, though, you set the stage. You make the rules. And, you can win big. We all hear about business superstars – CEOs of major corporations, entrepreneurs like Richard Branson and Steve Jobs but we never hear about Harry Huckinputch from Dinkledorf who came up with software for bookkeepers that he sold for $12 million. And why should we?

Mind you, it’s a mistake to go into business for the sole purpose of becoming rich, but if you go into business to achieve greatness, you might get lucky and achieve financial independence at the same time. Good luck with all that!

If you’d like more details about starting your own business, “Making the Business Case” written by Michael C. Volker is the right book for you.