What are the next steps after you come up with an idea for a new business?
After the ideation phase of a business, many teams loose focus. Fortunately, there is a tried and true blueprint that successful companies in all industries have followed in order to take a business entity from a spreadsheet into the real world.
Here are the three steps that all would-be Startup companies should consider after the initial visualization.
1 – How do you evaluate the current target market and market saturation?
Identifying competition should be first on the list of any start up. This will help a company to more accurately define its own role in the marketplace, narrowing the sales funnel and eventually increasing the ROI of all marketing efforts.
A high percentage of the first funds that you receive for your business idea will likely be earmarked for a highly detailed differentiated market analysis. Google Trends and the Google Keyword Tool are a great place to start, but the search should definitely not end there.
A startup company should consider geographic and demographic data from across the board in order to identify the audience that is making the current purchases of the products that it is considering selling.
More than 50% of businesses now include Facebook and Twitter commentary in their overall assessment of market saturation. If there are many comments about a product or industry trend, but most of the comments are negative, this means something much different than commentary that is overwhelmingly positive.
Researchers should be attuned to the fact that Facebook is prone to be much more negative than Twitter regardless of issue.
2 – How do you determine if your idea is profitable and scalable?
Profitability is a function of the perceived market value of your product, which can be approximated by a price/value industry matrix, minus the expenditures of your company per unit produced. With a volume that outpaces your fixed costs, you have a viable business structure, at least in theory.
Scalable ideas must incorporate variable costs such as taxes, marketing, promotion, distribution and government compliance into the equation. These kinds of calculations may require some professional assistance, but they should be determined before the initial start of production.
50% of businesses, and 60% of investors, want to see some sort of breakeven analysis in an initial business plan in order to help determine the overall viability of a would-be company. This should definitely be included; however, it should not be the end of the marketing analysis. Although it can be quite difficult to project profitability without a round of sales, every company should attempt to do this without exaggerating results, especially if multiple rounds of funding will be required to retain viability.
3 – How do you secure the flow of your marketing information to your customer?
One of the first things that an embryo company should consider is its niche in the marketplace. This is incredibly important in order to solidify the proper distribution of the marketing message. No matter how big or small a company, compliance with the current flow of information is critical. Business no longer runs the world of business – telecommunications does. This will only become more apparent as time goes on.
Currently, less than half of the Fortune 500 is mobile compliant by the standards of Google. 70% of those companies barely pass muster. 100% of these companies are spending millions in order to become fully compliant.
As of April 2015, any company that is not fully compliant by Google standards will begin to
lose visibility within the search engine, especially within the mobile search market. If this is a priority to a multibillion dollar company, this is a virtual death sentence to any high growth start up.
Guest Blogger Cameron Johnson is a business consultant and entrepreneur.
Over the course of his career he has conducted case studies on both social media optimization and non-profit marketing. Cameron has also had the opportunity to speak at international business conferences and was recently recognized as one of the world’s top 100 advertising experts to follow on social media