Doubt kills more dreams than failure ever will
Successful business is built on passion and purpose. And the first step of business is to develop an idea that you are passionate about, and that fills a need for the World.
Now unfortunately, not everything that your passionate about or skilled in is interesting to the rest of the world, and not everything is marketable. You see, if you have something people need but they wont pay for it; you don’t have a business. If you know it will make lots of money, but you don’t have the resources to build it.; You again, don’t have a business.
So what it's important to do is to look at the point of convergence (basically where the key elements overlap) to tell us what we are going to do, how you are going to do it, and how you will make money from it.
In this stage we look at the 3 essentials of any business idea:
Essentially, whether your business is actually helping to solve a problem, whether its physically and technologically possible, and whether people are interested in being your customer.
It is important that you have all 3 of these elements, because without one of them, you don’t have a successful business.
Feasibility is about determining whether your idea is technically, physically and organisationally feasible. Can it be done? By you? Sustainably?
The Value Effort Grid is a simple diagramming technique that helps you choose which business ideas you should pursue (and which ones you should drop) if you want to make the most of your time and opportunities.
The principle behind using the tool is that you score each activity you want to complete on two scales – firstly on the impact the activity will have, and secondly on the effort involved.
By plotting each activity on the Action Priority Matrix using these scores, you can quickly see the projects that give you the greatest returns on your efforts; and adopt the most appropriate approach for that type of activity.
To use the Action Priority Matrix, print off our free worksheet and then follow the steps. And watch the Video Module for more detail about feasibility and how to determine what you need to achieve your business? Do you have the ability already? If not how do you/can you get it?
Feasability - Video Module
In Desireability, you identified the need your business will solve, and in Feasibility you looked at whether it could actually be done. Now we need to concentrate on those people who will buy the solution (product/service) that you are proposing.
Not everything that your passionate about or skilled in is interesting to the rest of the world, and not everything is marketable.
So Is your product or service something customers would pay for? You want to identify who your customers and markets are, and you have, but you now want to size the market, look at competitors, and figure out whether this market could grow.
A key to survival in business is knowing what income streams are available and being open to new approaches. Understanding the types of income you can get will help your organisation be sustainable by reducing its dependence on one income stream. The video module below outlines the basics of determining how and if your business will make money and be viable.
There is also the Income Diversification Tool that you can use to list the different possible streams of revenue and money your business could make.
Viability - Video Module
The first step of developing your business idea is to determine ‘what value do you provide?’ Value means ‘helping people’. So the question is: how are you helping people?
A business meets either a 'need' or a 'want', and the closer you get to what people 'need' the more successful a business generally is.
There are 2 key processes to take you through that you can use to make sure your idea is needed and effective:
Research enables you to develop an understanding of the problem and the people you are helping. It enables you to quickly question assumptions, and to inspire new solutions. And with the accessibility of modern technology, no longer to we think of market research as highly sophisticated, expensive and complicated.
Below are the key initial questions you should look to answer to determine whether your idea is desirable:
Do your customers care? – You need to care about the problem you are trying to solve, and there has to be a sizable number of other people who also care.
Does your product address a need, for you customer? – People buy things for 2 reasons: because either they need it or want it. But just because you think people need it, may not mean they think the same.
What makes your business different? – Being different isn’t always enough, you need to be better. Making your product cheaper is not different nor better.
Is the market big enough?
Market research is something you will find you will constantly need to do over the course of starting up, and running, your business. So check out the Instant Market Testing sheet to give you an idea of some of the questions you need to be asking people now and in the future.
2. Needs Analysis
A Needs Analysis is simply a technical way of confirming: Are you really giving people what they need?
The process is as complex or simply as you want it to be, but it aimed at making you think hard and rationally about what value your business is providing and what need it is fulfilling.
The first step is to Map the problem your business is solving, or the need it is meeting, and determine what are the other factors that also contribute to this problem? Are there other needs your business could meet? Are you actually addressing the right need? Use the Needs Analysis Worksheet and the video module to help you through this process.
The second step of the Needs Analysis is to get out and talk to the people you are providing value for. It’s important to review your Needs Analysis to see if you really were providing value in the way you thought you were. You may find you now have a new idea, or a different approach, the main thing is to confirm your purpose and value.