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2019

There’s one fundamental difference between an experienced business owner and an aspiring entrepreneur.

 

An experienced business owner knows the value of an idea.

 

They know an idea is worth… nothing. Not a dime. Even a good idea.

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That’s because ideas alone are easy. You probably have at least one every time you take a shower. The hot water goes on, you close your eyes, and immediately you have a vision of a product that will make you millions.

 

It happens to all of us, all the time.

 

But how many of those ideas have you built? How many of the ideas that have appeared to you in a flash while you were soaping up have become real products that you created and marketed? None, right?

 

That’s probably because none of those ideas came with a detailed production and marketing plan  you could follow step-by-step. They didn’t come with a skilled team already in place. And they certainly didn’t come with funding.

 

Ideas are easy. Implementation—that’s hard.

 

That’s why you have to choose your business ideas carefully. You can have a new idea every day but turning that idea into a business takes time, effort, energy and money. It might be a year or two before you really know whether that flash of inspiration really is a million-dollar spark or just the light bouncing off a soap bubble.

 

You have to learn to filter out the genuinely winning ideas from the concepts that will break apart at the first sign of pressure.

 

There are lots of different ways to do that. You can conduct market research to see how similar products or services are being received. You can bring together focus groups and ask people whether they’d buy what you want to make. You can even use crowdfunding sites to see whether people like your idea so much that they’re willing to pay for it in advance.

 

All of those methods have value. Some of them will be essential. (You can’t build a product without doing at least some market research.) But none of them is perfect.

 

Market research only tells you how similar products to your idea have performed. It won’t tell you how your idea will perform. Focus groups aren’t made of real customers holding their real, earned dollar bills, and people never know what they want until it’s right in front of them. Even crowdfunded projects that built an audience and raised funds haven’t always generated a product. Some have raised millions on the back of an idea that turned out to be impossible to build.

 

A wild idea? Good

 

There’s a better way to measure the potential in an idea.

 

You measure its wildness. Not just how wild the idea is, but how wild you feel about it.

 

The more enthusiasm you feel for an idea, the greater the likelihood that other people will feel the same way. Not all of them will feel as crazy about it as you but some will, and plenty of others will feel just enough enthusiasm to pay for it.

 

That’s not guaranteed, of course. When it comes to picking ideas, there are no guarantees for commercial success. But the depth of your enthusiasm is a reasonably good proxy for the market value of an idea.

 

And even if it isn’t, even if you’re nuts about a concept, spend a couple of years developing it, and find that it doesn’t fly, you’ll still have achieved something awesome.

 

You’ll have had fun.

 

You’ll have spent two years building a business that made you proud and that you enjoyed building.

 

That’s another sign of an experienced business owner. They understand that they can’t predict what will happen at the end of the production process. They know they can’t control what their customers do when the product is ready. But they do know that they can control what they do—and they can control whether they’re happy as they build their business.

As you’re reviewing the ideas you dream up in the shower, don’t pick the first one you thought of. Pick the last one you’re still thinking of.

 

 

About Joel Comm

 

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As an Internet pioneer, Joel has been creating profitable websites, software, products and helping entrepreneurs succeed since 1995. He has been at the frontlines of live video online since 2008 and has a deep expertise in using tools such as Facebook Live, Periscope, Instagram or Snapchat to broadcast a clearly defined message to a receptive audience or leveraging the power of webinar and meeting technologies.

 

Joel is a New York Times best-selling author of 15 books, including “The AdSense Code,” “Click Here to Order: Stories from the World’s Most Successful Entrepreneurs,” “KaChing: How to Run an Online Business that Pays and Pays and Twitter Power 3.0.” He is Co-Host of The Bad Crypto Podcast one of the top crypto-related shows in the world and has spoken before thousands of people around the world and seeks to inspire, equip and entertain.

 

Web: https://joelcomm.com/ or Twitter: @JoelComm

Read more from Joel Comm

 

Bank of America, N.A. engages with Joel Comm to provide informational materials for your discussion or review purposes only. Joel Comm is a registered trademark, used pursuant to license. The third parties within articles are used under license from Joel Comm. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

In 1996, Larry Page and Sergey Brin, students at Stanford, came up with an idea for a better search engine. Page and Brin’s insight was that a webpage was likely more valuable if a lot of other webpages linked to it. Accordingly, their new search engine – Google.Stanford.edu– ranked highly-linked pages higher, thus offering better search results.

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The two young founders were soon asked to give a demonstration of their work to legendary Silicon Valley investor Andy Bechtolsheim. He was so impressed that he wrote out a check for $100,000 on the spot, to “Google, Inc.”

 

The problem was that the two young founders were unable to deposit the check because they had forgotten to incorporate their business, so the check sat in Sergei’s desk drawer for two weeks until they completed that step.

 

I’m sure you’re thinking that Google is a unique story, but I am here to tell you it is not; it’s almost an ordinary one. It’s not unusual for a startup to get a sudden influx of cash from inverstors and they must be prepared to process that investment when they do.

 

This all then begs the question: What exactly makes a business a good investment to a so-called “angel investor?” If you’re looking for investors, here are some of the top things they look for in a business:

 

1. Opportunity: Bechtolsheim saw an opportunity in Google unlike any other, and while that is rare, what Bechtolsheim was seeking was not: namely, an opportunity to invest his money and make a good return.

 

Do you ever watch Shark Tank? Same thing.

 

Presenting your business as a great opportunity is vital. Investors need to see that by helping you, they can help themselves, and that comes from not wanting to miss a golden opportunity. Your job then, as the entrepreneur, is to show them that your idea/business is that opportunityand offers something unique to the marketplace.

 

2. The competition: Google, at the time of its initial investment, had competitors in an emerging field, but none that dominated the market. Remember AltaVista, Ask Jeeves or Lycos? Today, in most industries, there is a lot of competition. As such, you need to show investors that you not only know who the competitors are, but that you are better than them.

 

3. The financials: Again, let’s think about Shark Tank. Kevin O’Leary, Mr. Wonderful himself, is all about one thing: Money. And the money is based on financials. Does the business show enough promise and profit that the investor will see a substantial return in a short amount of time (a few years at most)?

 

The financials will tell you.

 

Knowing your numbers is critical in showing investors you mean business. Investors want to know what you’re doing with their money, and why. Having a business plan with realistic financials is critical.

 

4. The team: Bechtolsheim believed in Page and Brin, and indeed, few things impress investors more than a great team. Often that is what the investor is really investing in, the team. As such, the quality of your team is vital in selling your company’s worth to an investor. A great team has credentials, experience, smarts, contacts, charisma and mad skills.

 

5. You: In order to run with the big dogs, you need to act like one. Show investors you belong. Explain why you deserve their money, and what they can gain from investing in YOU. Because in the end, you are your businesses biggest asset.

 

Bottom line: There are a lot of ways to find investors these days, and it can be a challenging process. Making sure that you have these five things down pat will go a long way to ensuring that when you do find that right investor, and get to make that all-important pitch, you will stand out from the crowd.

 

Investors are out there, and they wantto invest in great businesses. Give them that chance. Prepare to impress, and then prepare some more.

 

 

About Steve Strauss

 

Steve Strauss Headshot New.pngSteven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss

   

Web: www.theselfemployed.com or Twitter: @SteveStrauss

You can read more articles from Steve Strauss by clicking here

  

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice. Bank of America, N.A. Member FDIC.  ©2019 Bank of America Corporation

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