Top Story of the Week:
Is It Time to Start Your Business?
Copyright © 2020
By John Hauck
Okay—you’ve had this idea of what you could do that nobody else seems to be doing and you think it will make you rich, your own boss, and serve an unfulfilled need in the marketplace. But you don’t know where to start. You’re lucky if you live in Michigan.
So our little spot in Southeast Michigan has become noticed, no?
BUT WHAT ABOUT TIMING?
From “bbc Entrepreneurial Training and Consulting” [June 29, 2020 Newsletter]:
“Some of the world’s best companies were founded in the worst times. More than half of the Fortune 500 companies were started in a recession or a bear market, according to a 2009 study by the Kauffman Foundation. The list of companies includes such household names as General Electric, General Motors, IBM, Hyatt Hotels, Hewlett Packard, Microsoft, Disney, Toyota and IBM. Successful startups such as Airbnb began during the 2008 global financial crisis.”
Now is as bad a time as any, which is potentially a good thing. According to Eric Ries, whose 2011 book, The Lean Startup, has sold over 1 million copies worldwide, says that economic downturns are, in fact, the best times to embark on a new business.
“The best time to be an entrepreneur is when everyone is running for the exits. So yeah, it’s about to be a great time to be an entrepreneur,” said Ries. “When things aren’t going well in the economy it tends to leave holes that entrepreneurs with the right vision can fill.”
Forget your business plan. Before you spend your life savings, your 401(k), and your inheritance it is imperative that you find out that your product/service/invention/idea has a market. Yes, there is wishful thinking, (“this is better than sliced bread!”), and you know you will make a fortune if you can just put all the pieces of the puzzle in place. But did you ask anybody, “Would you buy this?” And, most importantly, “What would you pay for it?”. Those are the two pivotal factors you have to address before you invest “time, energy and/or effort for future advantage or gain…” [Webster’s Dictionary definition of investing]
To determine if your business is going to be worthy of future effort you have to present your idea to no less than 100 prospective buyers. You must tell them what you are offering and, most importantly, ask them what they would pay you. If it costs you $10 to produce and your prospective buyers say they will pay you $5, then you have saved yourself much grief -- notably time, money and effort.
Several Government agencies utilize an “i-corps” program to help university programs commercialize their idea. The most intensive part of this program is the “customer discovery” process, where these teams have 2 weeks to interview/discuss their proposal/idea with 100 prospective customers/buyers. Stories abound that begin with, “I was ready to invest my life savings…until I learned that nobody was as passionate as me, and nobody would buy what I wanted to sell…”
DO YOUR CUSTOMER DISCOVERY!!
If you have any questions or comments please contact John at firstname.lastname@example.org.
Look for part two next week.