5 Things You Must Know Before Creating Your Dream Business

Building a business from scratch can be terrifying for the first time entrepreneur. There are so many questions that need answering such as where do you start? With a business model? Should you focus on marketing and sales? What about product development and securing intellectual rights? Oh wait, but I also need to secure funding somehow, right?

The list is truly endless and daunting for someone starting their first enterprise.

After helping thousands of students build their dream businesses at ThePowerMBA we’ve discovered a number of points that come up in nearly every business case we look at.

In this article, we are going to focus on 5 of the most common we come across and bring a little order to the chaos that can arise when building a business.

#1 KNOWLEDGE IS POWER

Now there are 3 common misconceptions about why entrepreneurs are successful:

1. They are “visionaries” who wake up one day with that “light bulb moment”.
2. They were lucky
3. It’s because they are extremely passionate about their idea

While success might be attributed to one of these three factors, in our experience this is certainly not the norm.

If you wait around for sudden inspiration you’ll miss out. A much better approach is to train yourself to identify potential opportunities and skill-up so that when they do arrive, you are in a position to fully take advantage of them.

It is not a matter of being lucky, nor being passionate alone, it is a matter of having the right knowledge to get your business idea off the ground.

#2 FIND A PROJECT THAT SUITS YOU

What do we mean by this exactly?

Well, it’s about pursuing an idea or project that aligns perfectly with your skillset, knowledge, industry contacts, and ability to finance.

Think of it a bit like the relationship you have with a partner. If your personalities align and complement each other everything will probably work out well. However, if you’re constantly rubbing each other the wrong way and there’s friction between both of you, then it probably won’t.

Starting a business is the same.

So what we recommend is you complete the following checklist that runs through all the factors that need considering before launching a business:

1. What’s the risk level?
2. What’s the market potential?
3. How much money will it take to get off the ground?
4. What are the primary costs?
5. What are the initial steps that need to be taken?
6. What do we have to be good at for it to work?
7. Do you need to have contacts within the industry to make it work?

Make sure to write them down on paper and once you’ve finished, ask yourself this:

Of all the potential business ideas out there, why did you decide to pursue this one?

If you can answer that question convincingly and feel confident in your checklist then there’s a great chance of your business idea becoming a success.

#3 DON’T REINVENT THE WHEEL

A common mistake many entrepreneurs make is that they believe success hinges on the “true innovation” of their business idea, that it somehow has to completely disrupt the entire market.

Again, while there are certainly some cases where that approach has worked, the majority of entrepreneurs who go down this route end up in disappointment.

Why? Because the risk is extremely high.

When you attempt to make significant changes to a market you don’t know how consumers will react. On the other hand, by taking an already proven concept the risk is extremely low — you already know this model works.

Of course, by taking this model and replicating it like for like means you’re competing against already established brands and your profit margins will be smaller.

So what we recommend is to find ways to disrupt the existing model. This could be to innovate the current distribution channels, leverage new strategic partnerships, find ways to reduce go-to-market costs, etc.

This way you mitigate the risks of a flamboyant new idea and instead carve yourself a piece of an already established market.

#4 IDEAS AREN’T WORTH ANYTHING

Don’t take this the wrong way but right now your idea means nothing, not until it’s proven in the market.

The fact is 99/100 ideas fail.

There were likely hundreds of people who thought about creating companies such as Facebook, Uber, Airbnb, and Spotify.

But how many Facebooks are there? 1

How many Ubers are there? 1

How many Airbnbs are there? 1

While they sound harsh these words need to be heard. Many inexperienced entrepreneurs become so attached to their ideas they find it impossible to look at them objectively, even when the warning sirens start to go off.

As a result, they waste a lot of time (and often money) pursuing something that was doomed from the very start.

What’s far more important is being able to turn that idea into a successful business concept. In other words, execution and market validation. Don’t fall in love with the first concept you come across. Instead, try to looking at it objectively, follow the checklist from point #2 before you get heavily involved with the project.

#5 WHAT KNOWLEDGE DO YOU REALLY NEED

Finally, let’s take a look at the 3 key business principles that separate the successful from the unsuccessful entrepreneurs:

1. 360° understanding of business
2. Business “superpowers”
3. Back yourself to think big

Most professionals specialize in a particular area of business whether that be marketing, finance, sales, operations, law, etc. But it’s impossible to be a successful entrepreneur if you don’t expand your business acumen.

You can not be an expert in digital marketing and know nothing about the operational or logistical side of the business. It will be impossible for you to execute a winning strategy without a 360° holistic vision of how a business operates at a core level.

Secondly, you need to master what we call the business “superpowers” — knowledge that separates you from your competitors.

This includes understanding how to compete and earn a competitive share of an established market through:

• Creating a unique value proposition
• Building a powerful, reputable brand
• Learn how to market your product better than competitors

It also involves understanding where the opportunities exist in disrupting the market:

• Identifying potential opportunities
• Understand what customers are looking for
• Convert these opportunities into viable business concepts

Finally, you need to have confidence in your ability and knowledge at making your business a global success. To look at the bigger picture and not be afraid to say “I can do that too.”

This confidence comes from learning the necessary skills and relevant business doctrine by taking a program such as ThePowerMBA.

Studying the success and failures from the world’s most successful entrepreneurs (Chris Barton, co-founder of Shazam, Eric Ries, author of The Lean Startup, and Rosie O’Neill, co-founder of Sugarfina, to name just a few) accelerates your learning curve and gives you the confidence to back yourself in making the right decisions.