We all know the feeling. The rush of adrenaline, you toss and turn in bed as you keep playing your newest business idea in your head. You start to plan every step and with every step your mind starts to flutter towards fantasy and less towards reality. The next day, you quickly research and jot down all the points that you need to remember. All the speeches you need to make to your suppliers and future clients. After the 3rd day, your rush of excitement is replaced with doubt. You start to question your own idea, is it feasible? Is it profitable? The doubt usually comes when the financial and time sacrifice is clear to you. Suddenly, there’s a risk and you are no longer smart enough to convince yourself that it will work. So, you think there must be another idea that can satisfy ALL your requirements next time and you drop your idea. For now.
There is a reason why our friends refuse to even consider our ideas. We can’t even convince ourselves to do it and we want to convince others? Well, get use to it. During my days at Cradlefund’s Go4Market classes, we call this ‘stress testing’. We would shoot down everybody’s ideas and our task is to rebound with a solid business model in order to convince even Simon Cowell. So here are some tips, if you give a damn.
- What you felt before, gut feeling or not; can be labeled as one deciding factor in your evaluation of this business idea of yours. Label it as your confidence. At the end of the day, if you do not FEEL confident about the idea, you won’t be able to run it. But instead of deciding on the whole she bang based on your confidence alone, let it only weigh 10% out of other deciding factors.
- The quickest way to find out if your idea is feasible or not is to quickly do up a Business Model Canvas. The BMC is great because you can split the whole canvas into left and right sections. Everything in the left section are your costs, and everything on the right section are your revenue/profits. In essence, you start sticking notepads in every mini section. At the end of the day, if your left section has way more items than the right, it means your idea is going to generate a loss. You either bulk the right section up by looking for more revenue streams or adding upsells etc(think Starbucks or AirAsia), or you toss the idea away and start a new one if you can’t think of any.
- The BMC is great for phasing out your business, you can do a few. One for each year with the next one being more complicated etc. It is also great for leaning up your business, which is a very important task for people who start out with zero experience, financial backup and credibility to boot. So let’s say you have a super complex BMC that targets 8 groups of customer segments, have way too many tasks under Customer Relationship and requires way too many key partners to start the whole thing. You start to imagine executing the entire BMC across a year and you know that you can never be able to complete the whole canvas, so you start cutting. You start removing tasks and unnecessary groups. Remember, it is twice as important to say NO in a business than to say YES, especially at this stage. Keep the BMC simple, clean and most of all, smart.
- So you have this great idea, the BMC is great as well. However, something’s holding you back. Something just doesn’t sit right. Now’s the time to start stress testing. If you couldn’t identify what wrong, others probably can. Let your friends and your family tear your BMC apart. It’s going to be painful but ignore all the ‘You can’t do it’ remarks and start noticing the patterns. If 10 people identify a problem in a particular area, you better believe that they are right and that you were wrong. It is also safe to assume that if everyone identify different problems, then its probably because they can’t find it as well. Time to talk to more people until you have a consistent pattern in the feedback collected. Know when to identify that you are being stubborn and when you are actually correct. After you talked to the 5th person, you would stop taking their opinions personally and you will only play the role of a surveyor.
- There is a cheat way to skip all that. In any pitch to investors, friends or family, there is a sure fire way to win their confidence. The answer is to bring in the sales. Which means, at the time of your pitch, you have already convinced a pool of people(no matter how small) to buy your service/product. Investors looking to pour in money to your business plans feel safe seeing a guaranteed revenue promise, especially if your pool of customers have already sign a written agreement. Your friends and family will also be more perceiving and less judgemental. However, this requires you to first convince your pool of customers, or to make up the numbers. If your goal is to strengthen your BMC which will fuel your business for the next few years, making up numbers wouldn’t be a wise choice. However, if you are desperate enough to winning the battle, by all means go ahead. Good luck winning the war though.
- Once your plan is solid and its time to take the next step. It’s time to finance your whole business plan. If you are the kind that feel like you don’t want to do it the moment you think of your own money being sacrificed, your business idea will never take off. Nor will your company. Entrepreneurs willing to run a business only if it is backed by other people are never in it to change people’s lives. You have to be confident about the facts, so thoroughly that you are willing to bet your entire life savings on it, and your parents and your grandmothers… you get the idea. However, it is easier to have other financial investors in addition to your own. If you own a business solely, you have the veto and get to decide on everything. So when you are wrong, not many will let you know that you are wrong and those that do, it is only natural that we ignore them. Haha. Which makes this point, have a few partners or investors. They are valuable in steering the direction of the company in areas where you can’t. They will make some effort to have their opinions heard, especially since they have invested in it. Moral of the story, you’ve got flaws. You don’t want your business to have the same flaws. Get other people who can fill those areas in for you.
- If you are the kind that has a new idea every 6 months and you are still feeling lost, then it is time to grow some balls. There’s always risks but there’s mitigations for each one as well. Once you have mitigated for all of them, what else is there to be afraid of? There’s a fine line between TRYING and SUCCESS. Unfortunately for us, trying also encompasses ‘losing’, ‘failing’, ‘giving up’, ‘on the way to success’ and ‘up and coming’. That’s what people call ‘loser’s btw. Haha. It’s not a fun job, being an entrepreneur. However, there’s a saying ‘Win or die trying’. I can also assure you, it IS worth it. Give yourself a minimum of 4 years of trying at least.