Carl has been running his business, Direct Business Advice, for 10 years. His company helps both new and established businesses to develop and grow.
Through his own experience in this, and other businesses, he understands how easy it can be to become so passionate about your new innovation or idea that you can miss the basics. You need to be able to stand back and think about how you can make the innovation happen, how you can manage it and get it to market. Businesses which succeed are those which plan. Who are your competitors? Do you have a business and marketing plan?
Once you’ve got your new product up and running, it’s all about running a business, and you need to think about having an exit strategy – how and when you intend to leave the business, or pass it on, in future.
Whatever your new product is, you will need a business plan – though Carl pointed out that it’s also important not be become too obsessed with such plans. Initially just putting down your ideas on one sheet of paper to get things going is a good idea – then developing from there. Who will you be selling to? What will you be charging?
One of the main points of a business plan is to try to foresee questions which prospective funders or partners are likely to ask, and this can be quite a challenge. The plan has to be carefully-worded so that you don’t promise too much. Money, of course, is a big part of it all. If you’re looking for investment you’ll need to come up with a financial forecast – usually for 3 years. It’s important to give potential investors the feeling that you know what you’re doing, you’re well-advised and that you have the right team around you. It’s unusual to get all the money you need from one single source, so you need to be aware of what opportunities there may be for funding.
A very important point to understand when you are developing a new product or launching an enterprise is cash flow. Money doesn’t come in at the moment that you complete a job or a deal – it follows later. More often than not, new ideas fail because they run out of cash.
It’s important to think about how things will work – how you will get your product to market, who might be interested in working with you, how you will market it to customers – while also being careful to get your terms and conditions right. Make it part of your procedures to use confidentiality agreements wherever you can and make sure you include intellectual property and the costs of both IP and its insurance in your plans.