Critical Steps to Take in Developing a Business Idea

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Like I previously mentioned, your idea doesn’t have to necessarily be a whole new thing. Scott Thurm and Joann S. Lublin in Peter Drucker’s Legacy include this simple advice: It’s all about the people, maintain the fact that, for some people, coming up with a great business idea is a gratifying adventure.

For most, however, it’s a daunting task. The key to coming up with a business idea is identifying something that customers want—or, perhaps more importantly, filling an unmet need.

Your business will probably survive only if its purpose is to satisfy its customers — the ultimate users of its goods or services. In coming up with a business idea, don’t ask, “What do we want to sell?” but rather, “What does the customer want to buy?”

Now, the trick is usually to be creative. And by creativity I mean, you’ll have to either think of something new or improve the existing. This will by no means be possible unless individual entrepreneurs undertake painstaking research.

What I’ve come to understand in the world of business is that assuming too much can be dangerous. Most notably, unsuspecting entrepreneurs suffer daunting loss of capital.

What we think people need, may at times be far from what they believe they need. So taking time before thoughtlessly jumping into business is an indisputable law of the business land.

Most people are inherently aware of these red flags. Yet avoiding them is another story. The truth remains, what I know plus what you know may widen our understanding.

So let’s look closely at, call them Critical Steps if you wish, in Developing a Business
Idea.

The first step entails customer identification or definition:

Now think about your business idea: What problem do you solve for your customer?

The first thing you need to do is describe who the customer is. If there is more than one type of customer, are you solving the same problem for all of them or slightly different problems for each one?

For each of your customers, write down the problem your solving for them. Tom Harris in Start-up – A Practical Guide to Starting and Running a New Business enunciates that it is very important to define the customers – these are specific groups you’re going to serve with your idea.

In business there’s market segmentation. In this regard, you should say who you’ll be targeting. For instance, your business could be targeting the youth, but specifically girls. You should have clarity on who your customers are. This goes hand in hand with the specific concern about them or their unmet need.

Tom also argues that, for each of the problems that you are solving, you will need to find out how big a problem it is for your customer. This is an important qualifier because if the answer is ‘well it’s a bit of a nuisance, but we can cope’, they are much less likely to part with their money than if they say ‘it’s a nightmare, we need to solve it to keep going’.

 

Secondly, there’s a concept tagged customer motivation:

At this point, you’ll need to determine the thing that’ll make sure that your idea is commercial. I mean you certainly don’t want to bring into the market what nobody needs.

Or as Tom puts it, this next question looks a little deeper into the motivation of your customers to not only buy a solution, but more importantly buy a solution from you. The way to answer this question is to look at the competition. The trick is to make your offering more attractive to the customer than the closest alternative.

Here we are looking for your Unique Selling Proposition (USPs or Vibranium as they call it at THuD). This may be an iterative process while you fine tune your ideas to exactly match the market needs. Their buying decision may be based as much on their feelings about your company as on their feelings about your product.

Questions to consider answering include:

What problem will you be solving? How will you differ from competitors? What’s in it for consumers? Will you be saving them money while simplifying their life?

Remember this, there are no “bonus points” for rushing through the process.

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