What is 'idea to business'? A comprehensive 12-step guide
Updated 25 May 2023
Having a business idea can be exciting for individuals who want to introduce those concepts to a wider audience. You could have ideas to expand existing business operations or the desire to start your own business venture. All businesses start as ideas, so you may benefit from understanding how to turn an idea into a business. In this article, we explain what 'idea to business' is and some steps you can take to convert an idea to a business.
What is 'idea to business'?
An idea is the starting point of a business. The source of a business idea can be from one person or from a group of people. You can form a business idea around a profitable product or service, or sell lucrative business ideas to third parties. An idea can also help bridge gaps in an existing business model or become the starting point of a new venture. An idea has to pass through many steps and processes before you can transform it into a business.
How to transform an idea into a business in 12 steps
You may love your idea and believe that it's a workable model. An idea is the foundation of any business, but you may struggle without inherent commercial value. It may involve many additional steps before it becomes a reality. The process from idea to business is typically methodical and logical. It considers the pros, cons, risks, limitations and feasibility of the idea. Follow these steps to transform an idea into a business:
1. Put the idea on paper
An idea can form spontaneously or after careful deliberation and analysis. The idea may sound flawless in your mind, especially when you devote a significant amount of time and energy towards it. It's important to write down your idea clearly, on paper, to build around it and flesh out details. Writing down your idea and adding concrete plans to it can help you prepare a business plan.
You can keep improving the idea until you get a business plan to present to partners or invested individuals. The plan can include aspects like your business goals, details of the product or service, market analyses and sales and revenue projections. An idea that develops into a concrete plan can fare better when you present it to potential investors and financial institutions. Investors and banks may lend more resources with less hesitation to individuals who present clear, detailed business plans.
2. Perform market and competition analysis
Your idea may sound unique to you, but there is a possibility that there are products or services similar to yours in the market already. As you develop an idea and start getting the business plan ready, it's important that you research the market for similar products and services. Research the popularity of similar products or services, review consumer feedback and identify opportunities for collaboration. This analysis may benefit you to understand if your idea is feasible, needs improvements or if there is space and demand in the market for it.
3. Identify your USP
A Unique Selling Proposition (USP) is a feature or benefit unique to a product, service, brand or company. A USP increases the possibility of a customer moving to a new product or service from the one that they're using now. If your product has features similar to existing products, you may add unique features to create a USP. It can be the features, pricing, customer service or design. Once you have identified your USP, it's equally important to convey it to your target customers so that your idea, product or service can stand apart from the competition.
4. Create buyer personas
A buyer persona is a speculative representation of a target customer, based on data and research. It helps you to understand the needs of your prospective customers and tailor products and services that meet their demands and requirements. It can help you form marketing and advertising strategies directly focused on a specific target group.
You can create buyer personas based on research, interviews and market surveys. You can start by creating a couple of buyer personas and create up to 20 if required. Most businesses can generate a comprehensive understanding of their target audience with less than 20 buyer personas. A buyer's persona may include fictional personal details, education, designation and interest.
5. Collect feedback
The steps so far help you collect the information you require before you set up your business. Without research, if you launch a product and find that clients want modifications, it may cause losses and delays in making the modifications. It can also cause a setback in the momentum required for a new business.
That is why feedback is crucial, not only for the product but also for branding, advertising and marketing. It's important to change business plans by incorporating feedback. Based on the feedback, you can also prepare accordingly for meeting capital requirements, setting up recruitment processes and developing production strategies before setting up the business.
6. Start building a team
You can only start hiring professionals once you have the required licenses, but you can start looking for the right team members earlier on. Your team can include business partners, employees, investors, mentors and customers who are willing and able to provide unbiased feedback. Make sure your partners have the same business goals and that your employees have specific skills that can help enhance your business operations. Ensure that investors are aware of your idea, business goals and the steps you plan to take in the future.
7. Create an online presence
An online presence and clever digital marketing strategies are key to building a client base. Build an engaging website with relevant information about an upcoming product or service, its estimated launch date, the company history and important company information. You can use digital marketing and social media marketing strategies to attract traffic to your website. The website can also include testimonials from customers who have tested a product or service. Include your website in all your marketing and advertising material for maximum impact and reach.
8. Build a prototype
Build a basic prototype with the bare minimum requirements that you want to offer your customers. It may look different from the final product and may not contain some features. You can offer it to the core customer base and wait for their response and feedback. With the feedback for the basic product, you can work towards perfection and create the product as per your business plan.
You can also test the product or service to assess whether it functions well or if the features are in sync with requirements. You can also use a prototype to record customer experiences and collect data from usability testing processes. You can do a trial run of advertising and marketing campaigns to gauge responses and tweak your strategies accordingly. It's ideal to have a fully tested product or service and a website ready for product launch.
9. Safeguard your idea
Once you have a final product or service after evaluation and adjustments, it's necessary to protect your idea by securing the corresponding intellectual property (IP) rights. This also helps in licensing, selling and commercialising your product or service. It can increase your market share, raise profits and improve the overall valuation of your business. It can prevent competitors from copying your idea, product or service.
10. Evaluate goals and strategies for your business
Experiment with marketing strategies, promotions, sales pitches and distribution channels that you can use repeatedly. Choose a strategy that is cost-effective, reusable and impactful. After you've completely defined your business idea, discover your ideal customers, find out more about your competition and set goals that can guide you to success in your new venture.
Set goals that are clear and easy to evaluate your performance against. Because the initial goals you set may need some adjusting after your business gains traction, a flexible mindset is key to making readjustments. This can ensure that you're forming goals that match your needs, abilities and business attributes.
11. Launch your product
You can launch your product after testing. By then, you may also have a marketing strategy in place and a well-trained team that can respond to all product-related issues. You can choose a minimalistic launch event if you have limited resources and funding. If the product is crucial for your company, you can go in for a full-scale launch and invest more money and effort towards it.
12. Accelerate sales and company growth
Once you have launched your product, you can revisit your business plan and update your production and marketing strategies. If you're thinking of expanding, you can rework your hiring strategies and develop financial strategies to secure the required funding. You may focus on hiring the right employees who align with your business goals and are clear about their roles and responsibilities.
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