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Ask any successful entrepreneur how they came up with the idea for their business and they will likely be able to pinpoint the exact moment or scenario. For my Startup Punch List, a project management app that helps contractors and homeowners do remodeling better, the idea came from a particularly difficult experience renovating my home in Venice, CA in 2017. Although I did everything to make sure that my renovation was a success, poor communication between me and my contractor combined with payments for goods and services that I thought were provided (but not actually received) created a gap between us and caused significant delays . Since the project was more than double what it was originally (ouch!) On both budget and schedule, I knew there had to be a better way to make communication and pay more efficient.
Following this revelation in 2017, I devoted myself to building a modern tool for home remodeling easily and efficiently that was both homeowner friendly and optimized for contractors. While there isn't a single blueprint for success, creating the hit list provided important insights into how entrepreneurs can use the resources available to turn an idea into good business. The following four examples are by no means exhaustive and provide a great starting point for individuals – from independent artists to startup founders (and everyone in between) – who want to go beyond the idea phase and bring their vision to life.
The tech startup
Founding a technology startup and raising capital from outside investors requires a tiered and structured approach. As a first step, it's always best to research the market to determine the need for your product, identify your target customer, and understand what (or if any) competition is out there.
Related: 20 Business Ideas You Can Get Started With Under $ 10,000
After doing a thorough market research, the next step is to come up with a business plan. Investors, and ultimately customers, are looking for a clear and concise pitch that will identify the need and demonstrate the solution that will be provided. Essentially, you need to convince potential investors that your solution is the best product or service to meet the identified need AND that there is a segment of the market that is ready and willing to buy the product for you to be original Can repay investment. The best way to test your pitch? Bring it to your friends, network and family and ask for criticism that is as constructive as possible. Focus on people giving you honest and thoughtful feedback. This is your chance to improve before it really matters!
In creating the Punch List business plan, I did three things from the start:
I created a short but thorough deck of 10 slides to visually tell the story of Punch List and to best communicate my product plans for the app. In this deck, I shared my unfortunate founding story and how Punch List would have prevented the situation, highlighting the value for both contractors and homeowners. I then went into how I wanted to make money with the app, explained how much I needed to collect, and outlined what I was going to do with the funds.
I then wrote a two-page document to add details that could not be shown in the slide deck. Not only did this encourage me to keep the deck visually appealing, but it also helped me be as specific as possible – the devil is in the details. And investors love details!
Finally, I condensed the two-page document even further and wrote an elevator spacing that could be given orally in two minutes or less. One of the most important attributes that an investor will look for is your ability to precisely formulate your business plan. If you can't come up with your idea efficiently and excitingly, then how can you ask investors to be excited about it themselves?
Next came the hard part: raising capital. Fundraising can come from friends and family, from a bank or financial institution, or most likely from institutional investors such as venture capitalists. While this may seem daunting at first, keep in mind that you have already put the work into getting to this point. Start with the people you are most comfortable with, then talk to strangers. This strategy will help you practice your pitch, refine your plan based on the feedback received, and prepare answers to questions you will receive along the way. Don't be afraid to ask a warm introduction to potential investors – these will go a long way in connecting you with those who are best suited to your idea.
Related: Do you need a business idea? Here are 55.
Before trying to recruit real venture capitalists (VCs), I started with my parents. While I wouldn't say my parents are the most tech-savvy consumers, they gave me great feedback on the deck graphics, the words I chose to describe the product and target customers, and my delivery. In many ways, it was the perfect start. From there I went to meet friends in the tech industry, previous contractors I worked with, and even the Venice contractor I hadn't spoken to in 3 years. All of these practices made perfect and I was able to secure funding from real institutional investors!
The artists' marketplace
Very different from starting a startup, doing something that you really enjoy is a great way to make extra money. Turning your skills into a profitable business may seem as simple as the craft itself, but it requires setting up an efficient pricing structure, setting scalable goals, ensuring a consistent end product for the customer, and wearing multiple hats as a stand-alone business. Marketplaces like Etsy provide creatives and artisans with a streamlined platform for listing, marketing, and selling items and charging fees based on a percentage of sales. These marketplaces are a great place to get your feet wet and test your original product as they provide artisans with the opportunity to meet millions of potential customers for a small upfront investment.
For merchants with an established fan base who want to avoid fees that are set as a percentage of sales, eCommerce executives like Shopify or Weebly offer a variety of tools and services to start and grow businesses with flat monthly fees so that Business owners can stay in control of their profit margin.
Building a business around your own original artwork is very personal and potentially emotionally (and financially) daunting. For those looking to get their feet wet, these marketplaces and e-commerce platforms provide an excellent way for individuals to determine if the entrepreneurial path is right for them.
The service marketplace
In recent years we have seen the on-demand economy shift from fast and objective services (like the delivery of groceries) to more complex services that require professional expertise (like the installation of smart homes).
For contractors, from consultants and creatives to professional service providers, marketplaces are a great tool to connect with companies of all sizes for projects that require highly specialized skills. Fiverr and Upwork are great tools for independent contractors to individually connect with companies looking for help with smaller, shorter-term projects. Contract work strengthens your independence, allows you to choose the company and day-to-day manager to report to, and offers the flexibility traditional employment lacks. If you are a professional looking to start a freelance business, a service market might be the right choice for you.
Related: 100 Companies You Can Start With Under $ 100
For those looking to raise funds to help develop a specific product, crowdfunding has become an increasingly popular option to raise money. However, according to Kickstarter, only 38.21% of the campaigns reached their funding goal by November 2020. To build a successful crowdfunding campaign that customers will love, entrepreneurs should use the following tactics:
Create a thorough description of the product with the appropriate budget and schedules
Outline the fundraising levels with compelling customer incentives
Build a robust pipeline of potential supporters through existing customer lists and social media
Allow plenty of time for questions from potential supporters
As opposed to trying to raise money for a tech startup, crowdfunding is a volume game – you try to raise as much money as you can from as many people as possible over a set period of time. This will require you to be less sharp with your verbal pitch (unless you've chosen to take this approach through your technology platform) and be more attentive to every request from numerous potential investors.
With a multitude of different crowdfunding platforms, from big names like Kickstarter and Indiegogo to Seed & Spark, it's important that you do your research and determine the right fit for your campaign. And as with any initiative, invest your time upfront researching successful crowdfunding campaigns – especially in your category.
The final result
There is no single blueprint for success. The good news, however, is that there is no better time to start a new business than now. From transforming a sideline into a new way to make money, to raising funds from institutional investors (and / or mom and dad), to freelancing at one of the newest companies, to soliciting total strangers to you about one Crowdfunding platform support numerous avenues to success. Ultimately, the biggest obstacle to business success is never to take that first step. Don't let the fear of failure hold you back. Jump in and see where it takes you.