You've spent a lot of blood, sweat, and tears thinking of an amazing business idea.
You think you've hit the jackpot, and you're sitting on a goldmine.
This is what you've been looking for your whole time - it's your mission to protect this idea with all you have and make sure that it really comes true!
A lot of entrepreneurs believe that once they have a genius idea, they need to go into isolation so that no one else can find out about their idea.
As soon as word spreads about their business, people from all over the world will be scrambling to build it first, it's the best idea in the world.
I'm sorry to be the one to break it for you, but it usually doesn't work like that.
When I thought of Condensr around this year, I thought that I had come up with the best business idea in the world.
"An app that summarises books into 10-minute narrations? Who wouldn't want that?"
I was incredibly scared to share my idea with people, even freelancers, because I was scared they had the skills to build the product themselves.
Long story short, I quickly came to realise that the idea was not as special as I thought.
See, it's never so much about the idea - it's about who's better equipped to take the idea and make it happen.
That's why I wanted to break the process down into steps anyone can follow.
Here are the 5 simple steps to turn an idea into a profitable business.
Write your business plan
Once you've got an idea of what business you want to start, you need to work on creating a business plan.
The business plan is important because it will help you outline the steps you need to take to make progress in your business.
Without a business plan, you'll be working on different things in random order - you'll be like a headless chicken.
When you have a business plan, you're able to better understand what you need to do, what you're working towards, and what the next steps could be.
Luckily for you, there's no need to spend days or weeks writing a plan.
Although most investors and 'gurus' will tell you that you need a plan that's up to 100 pages long, you can get away with a 1-page business plan.
I've written an article that highlights the 1-page business plan that will take you from 0 to $1m.
The article covers all the checkboxes the plan needs to cover, and you're even able to get a free business plan template by joining our community using the box at the top of your screen.
A business plan provides clarity and context, it helps you pinpoint the most important things to work on, and it's super simple to go back and make changes to it when needed.
When you're working on a business, it's inevitable that things will change.
In fact, when you're planning to build a business, there's a lot of assumptions you have which will end up completely changing once the project is done.
For example, with Condesnr, we went through dozens of changes and micro-changes before we got a little clear on the idea.
Even then, we knew it wasn't worth pursuing anymore.
Instead of leaving you on a cliffhanger, I'm going to mention a few of the most important things your business plan will need:
- Your audience
The most important part of the whole process is your audience.
Who is going to be your customer?
Who is going to buy your products or services?
You need to have a person in mind.
Focus on the customer - they need to have a clear problem that you're able to help them fix.
- The problem
The problem is what you're going to be helping your audience with.
Essentially, what will your product or service be fixing or solving?
Entrepreneurs make money because they solve real-world problems for people and businesses.
Entrepreneurship is not about making money, it's not about having status.
Entrepreneurship is about creating value in the world and, in return, you get compensated for the value that you create.
The bigger the problem, the more valuable you will be.
- The solution
Jeff Bezos solved one of the biggest problems - he made retail available online.
Now think about your solution - what is your business going to be doing in order to solve the problem?
When I started Hawk Prospecting, I was an agency owner with a problem - it was difficult to find people's contact information to reach out to them, and so I wanted a better, cheaper solution.
The solution was a tool that helps you find people's contact information. Very simple and effective.
- Your business model
How are you going to make money?
How will your business work?
There are two main ways to monetize your business with a third way that's done by a handful of businesses.
The first is one-time purchases.
These are prevalent in eCommerce stores because customers come in, buy a product, and leave.
You may get repeat customers here and there, depending on your product, but that's essentially how it works.
The other business model is subscription.
SaaS products are all run on a subscription model.
Spotify, Netflix - these are examples of a subscription business. Even eCommerce companies can implement this too.
Now the third one I mentioned was Google or Facebook's model - the advertising model.
The service or product could be free but you make money from advertisers.
This doesn't need to be your only method of monetization - Spotify uses this for their free users while making paid users subscribe.
- Customer acquisition
Now, how are you going to find your customers?
Think about your audience, where they hang out, and what might be the best method of acquisition.
You can start thinking about the engine of growth that you'll be using too.
Validate the idea
Now that you have a business plan ready, you can start moving forward.
You're going to need to make sure that your product is really in demand, and not just a cool, 'nice to have' idea.
To do this, you're going to need to get feedback from your audience.
Find out where your audience hangs out the most, and start asking them to get on a quick call with you in order to interview them about their problem, the solutions they currently use, how they use them and ask for any improvements.
When I was working on Condensr, I spent an entire month interviewing people.
By the end of it, I interviewed around 40 people and got about 25-30 high-quality interviews from them.
The problem is that a lot of people might tell you that the idea is good, and that they like it, however, when push comes to shove, they're not going to buy it.
You can predict this based on the answers they provide.
For example, people who told me the idea is good also told me that the problems they faced weren't really pressing problems.
On top of that, they haven't heard of any other competitor to us, even though there were a lot.
If you're introverted, like me, there is another option.
For Hawk Prospecting, I took a slightly different approach.
At the end of the day, you're not going to be able to do this any other way - you have to get the market's feedback in order to understand the demand for your solution.
However, it doesn't necessarily mean speaking to people on the phone or on a Zoom call.
For Hawk Prospecting, I simply sent people a 1-min survey where they can share their opinions and tell me about their most pressing problems.
This was called a problem-stack rank survey.
You fill it in with pre-existing assumptions you have, then your audience is able to upvote the assumptions that are true, and add in ones of their own if you missed any.
It's a great way to understand the problem and see if it's really worth solving.
I didn't like the effort and time it took to do all the interviews the first time around, and so this was a much faster way of validating the idea.
Finally, the most effective way to validate an idea is by simply collecting money for it.
When you're on an interview with someone, you can ask them (at the end) if they'd be interested in preordering the solution at a discounted price right now.
A lot of people will say no, however, if you can collect money from people, you'll be able to easily tell that this is a good idea to pursue.
The goal here is to get closer to product/market fit.
To learn more about this stage of the journey, you can read the book, 'The Lean Startup.'
Eric Ries talks a lot about idea validation and getting feedback from customers in order to keep iterating.
Hire the right people
There's an entrepreneur who I really admire called Ryan Daniel Moran.
I think that he explains the idea of the 'owner's model' as he calls it, the best.
See, the owner's model is a method of starting a business where you're simply the person who puts the play together.
You have the idea, but you're not the person who makes it happen.
You're going to be the person who brings the right people and resources together to make the idea happen.
A lot of people who start a business think that they can do everything on their own.
The product, the planning, the building, the marketing, customer service, shipping, etc.
However, at this point, you don't have a business, you simply have a personal project, a side hustle.
When you start to think like a true business owner, you start to think of ways to maximise your efficiency.
You hire people to do various roles, and you are there to cast the vision that guides the business forward.
The first time my partner and I started our marketing agency, we tried to do everything on our own.
We built the site, scripts, etc, then we did the outreach, the sales calls, and fulfillment.
That's precisely the reason we failed.
We weren't good at doing any of those things.
That's the reason I wrote the article, building your A-Team to scale your marketing agency.
When you build a small team, you're easily able to build your business like a true business owner.
You're no longer the person running the circus, you're now in the owner's seat.
As a business owner, you're able to take full advantage of the 80/20 rule - you're going to be able to spend more time on doing the important things needed that will drive 80% of the results for your business.
Focus on making sure everyone is doing what they need to be doing, hitting KPI's and constantly improving and scaling.
Focus on making sure you have the resources available to spend and generate the results your business needs.
When you're able to hire the right people, you're able to build your business with insane ease.
You might be wondering, "I just started the business, how do I hire people already?"
When it came to the marketing agency, all you really need is around $200 per month to hire 3 people.
You need a VA, a service delivery guy (media buyer), and a salesperson.
While the VA gets paid $200 per month, the others are working on a commission basis.
You can always find people who work for commission.
While that's how the agency model works, this same principle can be applied to many other businesses too.
Build an MVP
At this point, it doesn't make sense to build the entire business and go to market.
You've gotten some feedback from your market, and you have a rough idea of what it is you need to build.
However, that isn't the best way to go about things.
When you build an MVP, you're saving months of extra work, and a ton of wasted resources because things will still change at this point.
Even though you may know what people need, all the feedback you've got so far has been hypothetical.
People have not yet tried your product or service in order to give you solid feedback.
There are four main types of MVPs that you could build, I spoke about them in a separate article.
Zappos, an online shoe retailer tha was purchased by Amazon for $1.2 billion, started as a simple landing page.
The internet was still relatively new at the time, and there were no other people selling shoes online.
Nick Swinmurn, the owner of Zappos, had a great idea but wanted to make sure that people wanted the idea to begin with.
He went to shoe stores, took images of shoes, and built a simple site with the shoes on them.
Whenever he got a sale, he went to the store, bought the shoes, and shipped them to customers.
This was a great way to validate that people wanted to buy shoes online.
Another example - Buffer, the social media scheduling software.
Joel Gascoigne was a social media manager who wanted a more effective way of managing his client's accounts.
He realised there was no way to scheudule posts or bulk posts and so he decided to explore this idea.
Before going all out and building the software from scratch, he first decided to validate the idea.
He built a very simple landing page that told people to click a button to sign up.
When people clicked the button, they were redirected to a page that told them to give their emails if they were interested in getting notified when the tool launches.
[Similar to the email sign-up at the top of your screen :)]
He shared the landing page on his social media to see who would check it out.
The landing page ended up getting many sign ups, and so it was time to step things up a notch.
He added an extra step in the funnel - a page with the pricing.
He wanted to know how much people were happy paying for a software like this.
Once they clicked on a price, they were redirected to the email sign-up page again.
After realising that this was something many people were interested in and paying for, he then decided to build it and launch it.
These were both examples of a landing page MVP - one of the four main types of MVPs available.
Today, you may need to spend some money on Google ads in order to drive traffic to your site, however, when I tried this for Condensr, I was still getting a ton of sign-ups.
Who knows, maybe Condensr was a good busines idea afterall.
Imagine you spend months building something only to realise no one wants it.
Try to think about how you'll feel exactly.
Sad, angry, depressed even?
Think about the time you lost, the money you lost.
To avoid this pain, you start by building an MVP.
Although the examples of an MVP here were all landing pages, they can be a little more complicated in some cases.
They're close to their big launch, but they're currently on their alpha stage.
They have likely generated millions in revenue already, but they're still an MVP.
You can build something that works, but when it comes to an MVP, you should only build the one or two features that are necessary to make the whole thing work.
In Hawk Prospecting's case, all we needed to build was a way for users to insert a link and get the prospect's contact information back.
Later on, we could add more features, etc.
Scale the business
Once the MVP is built, you need to start getting users.
These are early users who will help you validate the business, start a feedback loop, and reach product/market fit.
At this point, you're going to be targeting early adopters.
These are the people who are most likely in need of your solution because they suffer the most from the problem you're solving.
In return for a solution, they're a lot more likely to help you build out the product by using it and sharing their honest feedback.
If you're working on a software business, the best place to find early (paying) users is by using something like Appsumo.
Appsumo is a marketplace full of software deals.
You're able to get software for up to 90% off and so it's a great place to get early traction/sales for your product.
Once you're on Appsumo, make sure that you're following up with your customers, asking for feedback, and reviews.
This will be a great way to get the feedback loop going, and making adjustments as necessary.
Once again, the goal here is to reach product/market fit.
This is a point where your business is the perfect solution to the problem your market faces.
Eric Ries says that if you ask yourself, "do we have product/market fit, then you're not there."
When you reach product/market fit, people will be buying your solution faster than you can handle.
At that point, it's time to scale, hire more people, release more features, and keep ramping up your marketing efforts.
I can't really generalise this step because every business is inherently different and so the same strategies or processes cannot be applied across the board.
Those were the 5 steps to turn an idea into a profitable business, the right way.
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Till next time,