Nothing beats a great new idea as the foundation for starting a business. Some great ideas take years to refine whilst others spring to mind in amazing ways.
Temper this inspirational moment with five things you need to know before starting a business. Or, to be blunt, before declaring war on those already in the market space you're invading. Canadian businessman Kevin O’Leary put it well: "Business is war."
1. Know yourself
Author of The Art of War Sun Tzu said, "Know yourself and you will win all battles." There you are, about to upend your career and family life in pursuit of a great new idea. Key questions: are you the right person for the job you're appointing yourself to? Is starting up a business the next logical step in your career? Would you give someone with your skills and experience the job? What are your strengths and weaknesses?
Entrepreneurs will award the leadership to themselves. An honest assessment of your skills will tell you what you need to build a team.
2. Know you’ll succeed
Having appointed yourself as the team leader, you now need to be confident that you can do the job. Past experience of taking on a challenge and succeeding is a good foundation. All startups begin happy and confident. But truly believing in yourself is demanding. You will have to believe in yourself and your great new idea when others no longer do.
3. Know the market
Great ideas are all very well but the cold reality is that there must be a value proposition. Entrepreneur Michael Skok articulated this well in an article for Forbes Magazine.
"A value proposition is a positioning statement that explains what benefit you provide for who and how you do it uniquely well. It describes your target buyer, the problem you solve, and why you’re distinctly better than the alternatives."
The key here is "why you’re distinctly better". You will be trying to take customers from the alternatives. You will be the enemy.
4. Know your business plan
Business plans are the death of many great ideas. Boring questions about who would buy your product and how much they would pay can be depressing.
A blank business plan template is intimidating. This is a battle between the optimist and boring reality. Of course, this battle must be won.
5. Know when to quit
"Business opportunities are like buses; there’s always another one coming." Serial entrepreneur Richard Branson knows his stuff.
No great idea is worth destroying your finances or personal life. If a business doesn’t show signs of success, then that great new idea is not for you – or the market – right now.
Many successful entrepreneurs have quit something. They re-emerge better and more successful.
As Sun Tzu said, "There is no instance of a country having benefited from prolonged warfare."