Tuesday, February 17, 2009

How to Come Up With a Business Idea

Create an idea or product that you believe can be successful. This is easier said than done. Coming up with a viable product or idea is sometimes harder than constructing a business plan. Having a good business plan is important for every entrepreneur, but what if you do not have an idea upon which to build a plan?

1-Get your creative juices flowing. There are many different ways to accomplish this task. Play a game, read a book, paint a picture, play a sport, etc. The point is, do something that gets you thinking and then focus that energy into creating an idea/concept/product. Do not try to force an idea to occur because this will usually result in bad ideas! Take your time, focus your thought, and create the right product for you.

2-Know your limits. Determining these factors will help you focus your thought process. For example, if you are interested in computers, but have no education or experience with computers outside of internet surfing or word processing, it will be difficult to create a marketable idea for computer software components. Keep your thought process reasonable. In other words, do not let your imagination run wild. When you become good at creating ideas, then you can let your imagination do some work, but not at first.

3-Seize upon any inspiration. Sometimes, ideas will pop up at the oddest times. Get a small notebook to carry around with you and write ideas in. This way you can look at your notebook and later begin to develop your idea.

4-Turn a possible business problem to a solution. For example, if you are interested in cooking, maybe you have a problem with the way an oven can dry out a chicken when cooking. Now that you have identified a problem, brainstorm and think of as many solutions as possible. It does not matter how crazy the solution is, just think about them and write them down. After you have written down every possible solution, no matter how crazy, go through the list and find the solution that you feel you can best accomplish. Surprise! You have probably come up with an original idea. This does not mean that you should pitch this idea tomorrow. All this means is that you should develop your idea, mold your idea, and perfect your idea into something you think people would buy if in the market. Also, this way of thinking will get your creative juices flowing. You may find yourself traveling a different path from your original field of interest. If this occurs, follow the thought until completion. You may be surprised where it leads!

Research: Wikihow

How To Write a Business Plan

1-Put yourself in the investor’s shoes. Ask yourself, “If I were going to invest X amount of dollars into a concept or idea, or even a product, what would I want to know?” Gather as much helpful and credible information as you can. Depending on your product, you may need to search long and hard for relevant information. Most importantly, do not lose heart if finding information, statistics, and graphs is more daunting than you initially anticipated. Your hard work will pay off when a potential investor becomes an actual investor!

2-Write up a draft for your business plan. At this stage, do not worry about capitalization, punctuation, and grammar. All you need to worry about is putting your ideas down on paper. Write down everything you think you need to compile an effective and efficient business plan.

3-Start to form your business plan. Begin creating section headings and putting the appropriate information under the appropriate headings. Once you have a general form, begin proofreading your plan. Correct all the mistakes that you can find.

4-Write an outline of your business plan, covering the following key concepts. Effectively separating your business' unique approach to each of these headings will organize your plan in a way investors find useful:

Description and Ownership. This is where you describe your product, mode of production, and establish who owns the company.

Assessment of the Business Environment. Address three points: Who needs you, who competes with you, and why you are able to sustain yourself. Your Economic Environment should detail the prevailing conditions of the labor force, local demand, availability of land, and growth trends in your target area. The Industrial Environment section should detail your competition, their modes of production, their relative power in the market, and a history of altruism. Finally, a Global Environment section should detail the overall global scale of your industry, and detail what is unique about your mode of production that will eventually lead your firm to prevail in the global market.

Management Plan. In this section you detail how your firm will be managed. This may not reflect the firm's ownership, so be sure to write this section with precision. Split this section in to two points, Labor management and Production management, reflecting your policies regarding people and machines.

Employment Plan. Here you describe your method of motivating employees to work for the betterment of the firm. Prove that your structure of compensation and advancement will cause a self-interested agent to take actions that benefit the firm, even when that agent lacks a sense of altruism.

Marketing Plan. Split this sections, production and marketing. In Production, outline the characteristics that set your product apart in cost and quality. In your marketing section, describe who will buy your product, how you will get it to them, and how you'll tell new consumers that you exist.

Financial Plan. This is a three dimensional budget that describes your minimum price to maximum price, the minimum to maximum number of units you will sell, and relative scale of production you could achieve with those prices to minimize costs over the long term.

Research: Wikihow