Becoming an entrepreneur while you work full-time can be intimidating.
You may want to start a business, but not know where to start.
Well this guide will give you step by step guidance with actionable steps that you can follow every day until you are a full-time entrepreneur.
Table of Contents
- Step 1 – Discovering and Creating Business Ideas
- Step 2 – Business Idea Validation
- Intro to the business model canvas
- Assumption creation and testing
- Setting up focus groups
- Assumptions confirmation or failure?
- Step 3 – Launching the Business Idea
Step 1 – Finding Business Ideas
The first part involves thinking of a business idea. If you already have an idea, you can skip to part 2 of this guide.
However, if you are still looking for a business idea while working full-time, there are many ways to think and find them that we are going to be covering.
I’ve written about many formulas, techniques, and strategies to develop business ideas, so we will touch on them all here.
The Business Idea Equation
The business idea equation is a foundational equation I have developed to help new and aspiring entrepreneurs understand all the pieces to a business idea. This will help you develop ideas that have strong potential to add actual value to the market, and it also gives you guidance for execution.
Part 1: The Business Idea Equation – The Problem
In this piece of the equation, you’ll learn how to discover problems that you can try to develop solutions for. Solving a problem is essential to building a great business, and finding the right problem to solve can’t be easy. This is where this guide on solving and identifying problems for business ideas comes in handy.
Part 2: The Business Idea Equation – The Value you can bring
The value you can bring is what you can offer to the market in a form of a solution that will add value to people. For instance, this may be using your coding strengths to build chatbots for people. Or using your sales skills to sell high quality organic groceries in your area. We’ll also dive into other areas such as startup capital and initial investment needs. Whatever it is, this guide will help you what value you can bring to the business idea.
Part 3: The Business Idea Equation – The Business Model
Once you know the problem you are solving, and can solve that with the value you can bring, then we will need to put a system in place to deliver that value to the customer. A business model can change how your business idea launches and operates substantially, so choosing the right one is important. This guide will teach you all the ins and outs of choosing the right business model for your business idea.
The Ultimate Guide to Successful Business Ideas
This is a guide I developed as the starters guide to business ideas for new and aspiring entrepreneurs. Many (probably including yourself) just don’t know where to start when it comes to business ideas. You may have many ideas or you may have no ideas. Well this guide will help you develop new and existing business ideas so they are ready for you to move to the next stage and validate the idea.
You definitely don’t want to miss out on this guide. It’s free as an e-book, as apart of the Business Idea Insight exclusive subscribers’ resources. Get it below.
How to find business ideas from patents
This is another cool way to come up and develop new business ideas, and is a route often overlooked by new and aspiring entrepreneurs. Which is exactly why I wanted to share that with you today.
Finding business ideas from patents involves searching patent databases for inventions and technologies that can solve the problem at hand. This technique pairs great with part 1 of the business idea equation.
We dive into the details of how to find the right patents that you could potential take over for a great business idea.
How to find business ideas from trends
Learn to spot the latest market trends and develop business ideas. You may not know where to look for trends, how to identify them, or even how to utilize them to make a great business idea once you see the trends.
I’ll cover everything you need to know how using trends to find business ideas, and exact and proven methods for finding new trends, without spending a dime. There is also a bunch of business ideas for you in this guide for inspiration.
Keeping track of your business ideas
Once you begin thinking of business ideas, you’ll want to keep track of them, so here are three tools to consider. Check out these top 5 tools to keep track of business ideas.
Below is a group of lists from Business Idea Insight. These are developed and created using the techniques, strategies, and tips we use on this site. As well, you’ll find a lot of unique ideas, as our philosophy is to share the idea, no matter how good you think it is. This has helped us stand out from the others with inspiring and unique business ideas for anyone.
Other Places for inspiration:
Entrepreneur Business Idea Resource Centre
This is a great place to start for inspiration. There is a lot of business ideas and many different kinds of lists for you to peruse. However, the one draw-back is that the business ideas they write about are very generic. It can give you a good sense of the different range and types of ideas, but I would take these with a grain of salt as their markets are very competitive. Check out the resource center here.
The Balance – Small Business
The Balance also has a great resource centre for business ideas. There are tons of different lists and the great thing is, is that many are unique and different. The one aspect I don’t like about this site is that some of the lists are so limiting, so it can end up limiting your creativity as there will only be a 2-3 business ideas in a single list. Check out the resource center here.
What industries to avoid:
The first rule about this would be to AVOID thinking of business ideas related to where you are working.
If you start a business related to the industry you are currently working in, you could run into complications and troubles with your employer. They may even fire you and/or sue you in the worst-case scenario, causing you to shutdown the business completely and lose your job. That’s why it’s advised that you start a business in a different industry.
Choosing the Right Business Idea For you
If you follow the business idea equation, you’ll be able to narrow down exactly what kind of business idea you should start.
Some of the items you’ll want to consider include:
- Small scale vs large scale business idea
- Working from an office or laptop lifestyle
- Raising money vs Growing organically
- What resources you have to start the business to begin with.
So for the first few weeks here, try and spend some time developing and coming up with business ideas. You’ll need to choose 1 business idea for our next step.
Step 2 – Validate the business idea
The next step is validating the business idea. A step often overlooked by new and aspiring entrepreneurs. However, if you learn and master how to do this, you can always make sure you’re starting business that have strong potential to succeed.
When you validate your business idea, in the end, you’ll learn:
- If your business idea has potential to make profit
- Who the target market and the size
- Potential price points for the product/ service
- What exact solution people want for that problem
The best place to start in that process, is mapping your business idea out using the Business Model Canvas.
This is one of my favourite tools to use as it is:
- Easy to understand
- Covers all important areas when you are in the validation phase
- Makes sure all your bases are covered
Each section will have certain criteria that assesses the business idea, and we will break down a few of the most critical sections.
Business Model Canvas
This is where you assess and investigate the costs behind the business. Some business ideas need a lot of investment and startup capital and some do not. For instance, a business idea may need machinery or a very expensive prototype to move forward. If this is the case, you may want to ask yourself if you want to run with this business idea.
If you don’t want to raise money and quit your job to run this business, you may not want to choose a business with a large cost structure.
Secondly, if there is a large cost structure, you better hope there is an even stronger revenue structure so you can be profitable.
The revenue structure of the business idea is how you are going to make money. It could be through direct sales of a product, sponsorship, app downloads, ad spend/ ad space, and many other ways.
But make sure you capture all the potential sources and assess if there are one or two that are strong enough to be a potentially profitable business.
Unique Value Proposition
This is a key part that many new and aspiring entrepreneurs fail to spend time on. This section is where you define how you will be different than the competition. This may be how you serve your customers, a new and unique business model, or just a new and innovative way to delivering your product/ service.
It is the thing that makes you unique from your competition.
Spend time trying to understand how this business idea is different from the rest. This will help you stand out and last against competition.
Completed Business Model Canvas
The full list of how to use all segments of the business model canvas to validate your business idea is here.
Going through all these steps with your business idea could take you anywhere from a day to a week, depending on how much time you have after work to go through this exercise.
Once you’ve gone through all these areas and developed the business idea into a more complete vision, the first step before going further is to ask yourself:
- Does this business idea look profitable?
- Does it have a potential market that would buy this product/ service?
- Does it solve a problem? And what does that solution look like?
- Can the idea have a unique differentiator?
- How will you sell your product/service (the channels)?
If you don’t have a strong answer for every single one of these questions, you may need to go back to the drawing board and think of another business idea to validate.
However, if your idea passed that test, you can move onto the next part of the business idea validation phase.
Assumption Creation & Testing
These assumptions relate to what you think the problem actually is. For example, I assume that people are thirsty. I also assume that they want to pay for a drink.
A question to test this assumption would be to ask if they are thirsty when they are out for a walk, and if they would like lemonade to quench that thirst.
- People are thirsty
- People want lemonade
With my solution, which is a lemonade stand, I assume that they want lemonade and only this drink to quench their thirst. I also assume they trust to buy it from me from the side of the road.
The question here to ask would be if people trust to buy lemonade from a stranger on the side of the road. I’d also ask them their favourite drink to make sure they wanted lemonade.
- People will buy it from a stranger
- People prefer lemonade
The revenue stream here is selling the cups of lemonade. I assume that people will want to buy the cup of lemonade for $1.00. This would yield a 70% profit margin.
To test this, I would ask people about their willingness to pay for such a lemonade. I would also want to inquire if they think they would purchase again if they thought it was good. For instance, if it turned out people would only want to buy lemonade once a month, it would be hard to have a consistent customer base to serve the business.
Revenue Streams Assumptions
- People will pay $1.00 per cup
- People will buy lemonade once a week
The complete list of assumption tests for each category can be found in this business idea validation guide.
This should take you about another week to two weeks to complete, depending on how many hours outside of work you can work on this.
Now, once you have come up with all these assumptions, you are going to need to test them. The best way to test the assumptions is through in-person focus groups.
Setting up the focus groups”
To setup a focus group, the best way is to try and get in contact with your target market. Once you know where your target market hangs out, you can go and hand out flyers in that area to potential customers, asking them if they would be willing to participate in a focus group for 20-30 minutes in exchange for some free coffee and donuts (provided by you of course).
You’ll want to include an email that they can contact and get in touch with you if they are interested.
From there, once you have about 10-15 people available, you will want to hold a focus group. This can be done at your house, or you can host it somewhere so it is more professional and people take you seriously (this is really important if you want a strong first impression).
And to be confident, you’ll want to host at least two to three different focus groups, with each 10-15 people. In total, this will give you around 30-50 answers which can be enough data to start actually putting the business plans together, or you’ll know to scrap it.
Along with your assumption questions, you’ll also want to note down:
- The demographic of the people that show up
- The psychographics of the people that show up
- Why they decided to come (they could be potential first customers)
Now, you’ll need to be patient during this part. You can end up facing a lot of rejection with people not wanting to join the focus group, but that is where you need to stay confident! This will be your first venture out as an entrepreneur testing an idea in the market, and sometimes the market isn’t the nicest.
This process could take you a month or even two to three months, depending on the amount of time you can commit. It will probably take you several full days of handing out flyers or gathering interest for focus groups. Then another month to schedule and coordinate the interviews, and finally a few weeks to process all the feedback you received. Sound longer than you thought? This process can be sped up, however, I am taking a more conservative approach so you don’t get burnout and can still perform at your fullest at work.
If all your assumptions are answered confidently, then the business idea is completely validated!
However, that is not usually the case.
Usually, you can consider the business idea “validated” if most of the assumptions hold up, especially the solution, revenue structure, cost structure, unique differentiator, and customer segments. If all these make sense, and are confirmed, you are ready to LAUNCH YOUR FIRST BUSINESS, and you can continue onto step 3.
If a large portion of your business idea assumptions did not hold up in your focus groups and market research, then you’ll unfortunately need to go back to the drawing board and choose another idea to validate.
This process can seem disappointing if this happens, however, just know that you saved thousands of dollars and millions of minutes that didn’t get invested into an idea that wouldn’t work anyways.
The business idea validation is key to keeping you on the right track!
Step 3 – Launching your business idea
Once you have your business idea validated, it is time to launch. And a large part of launching involves creating a business plan, financing/ cashflow plan, and an initial strategy.
This area is also one of the most ambiguous as many different business ideas have different criteria and steps to launch. However, we’ll be covering the most important steps to guide you.
You’ll need to create a business plan in order to have your business idea organized and planned out. This will help guide your vision and actions everyday.
The business plan is going to contain the following sections:
The marketing section will cover all the marketing activities, who your target market is, positioning and your marketing mix objectives. All these areas are extremely important for the success of the marketing segment to your business idea.
To break it down further, so you know what to include, we are going to dive into each of those segments:
The targeting section of the marketing strategy will explain how you will be targeting your primary markets and customers. For example, this could be through a low-cost approach, and you could be targeting the cost saving and penny-pinching group.
Target Market Profile
The target market profile is who these groups are that you are targeting. What makes them up? Who are they? Where do you they go? What is there ago? All the demographic, sociographic, and psychographic data you can find on them. You’ll want to answer all of these questions for each different primary segment you are targeting.
The positioning is where you will be positioned in the market. This is usually done through market research, and using a visual representation so you know where you stand, compared to competitors.
For the positioning map, you’ll want to choose two different things to compare them on. This may be by the rates, prices, quality of the materials, or whatever your industry is judged on.
Marketing Mix Objectives
The marketing mix objections will explain all the strategies, tactics, and steps you are going to go through for an effective startup marketing initiative. This will include planning out exactly how your online presence will be, any partnership marketing, and any other marketing tactic you want to use.
In this marketing mix, you’ll also want to map out your strengths, weaknesses, opportunities, and threats to your marketing, so you know if you fall short in any areas. For example, if you need a strong online presence for your business idea and model, and you don’t have any skills to create a website, that is a major weakness you need to take note of.
The value proposition combines the problem, solution, and unique differentiator from the business model canvas, into one section and vision. This is where you will define how the customer receives the value, and how your business will get value in return. It will also define why the customer will come to you, over their competitors.
The market focus will be the areas that you are going to serve. This section of the business plan overlaps partially with the targeting group in marketing. The market focus however, will be the different markets you will be targeting, and you will define those markets and who they are more thoroughly. Whereas in the marketing section, we mainly just defined how we will be targeting them with our marketing and business model.
The core activities of the business idea explains the key tasks and day-to-day operations that you need to do in order to be successful. Knowing this, and writing it out in your business plan will only help with success and reinforce what you need to do.
The market analysis will be where you conduct all your market research on your target market. It will contain information like the market size, for example, how many people you can potentially target, and the current revenues of other products and services in the market.
The market analysis will also assess the industry structure. So, are there any threats of entry to the market or barriers stopping you, you’ll want to investigate those. Along with any trends or data about how the industry operates.
This dives into the market analysis further, with exact competitor research and how the market is currently being served. What does your competition look like? Who is the largest? Are there different kinds of competitors? You’ll want to know all these things and have it in your business plan.
Projected Income Statement
The projected income statement should reasonably project out for one to two years the revenues, expenses, and your net income. You should also plan to make a few scenarios as things will usually be different once you actually launch. This will also show you how long you will be potentially unprofitable for.
The cashflow statement will be a very detailed tracking of all the cash inflows and outflows for several categories. Operating, capital exenses, financing, revenues of any kind, funding, investment, and any other cash inflows need to be recorded to. And, you’ll want to project this out for one to two years. This piece of the financing plan gives you a full understanding of the cashflows. If you ever hit zero cash, you’ll need a loan, and that will add more financing costs, so its an important tool to stay alive.
The last main piece of the business plan financing pan is the balance sheet. The balance sheet details and lays out all your assets and liabilities. If you have assets you buy, you record that, and write that against your liabilities, which may be shares of the company or retained earnings.
It could take you a few months to compile a strong business plan, depending on how much time you have outside of work. There are many sections that have significant detail and need a lot of time and attention. The business plan also helps you launch because you have all your strategies and financing planned, two major pillars in business.
Once you have all these pieces compiled it will be time to launch the idea!
If you need funding, you are going to have to raise money, and that is another beast to tackle. However, if you are looking for money, the best place to start is with friends and family. See if they have enough money that you could build your first product or service ‘minimum viable product’ and get your first few customers so you’re profitable.
Note of caution: Do not accept large sums of money from family as it can cause a lot of complications down the road. If the business fails, they could have mortgaged the house or extended themselves too much and lose their money. And that can cause a lot of family drama.
Don’t need funding?
If you don’t need funding, you are ready to begin your critical steps, the ones that you laid out in your business plan.
You’ll also want to make sure you buy the proper licences for your business and city regulations. For example, if you started a new restaurant, you may need a special restaurant business license from your city (usually available at city hall) or you may need licenses for serving liquor in your restaurant.
These steps can take a few weeks, as getting to city hall when you’re working can be difficult, and some may take time to issue. So be patient in this period.
Wrap it up
Lastly, you’ll want to keep your boss happy. Now that you’ve gone through all the steps to launch a business, you want to show up to work ready to work with 100% energy. If you don’t, they may start to question your reliability and you could get fired. This doesn’t always happen, but it can if you let it overlap into work, or if you are now showing up to work ready to work.
Best of luck in your entrepreneurial journey.