From the top · 14 October 2015

James Caan’s seven-day startup guide: Day one – Is my idea really a business?

James Caan has some sage advice for budding entrepreneurs
James Caan has some sage advice for budding entrepreneurs

So you’ve decided to become an entrepreneur – congratulations! You may not know it now, but you’ll remember this day for the rest of your life, hopefully for all the right reasons.

Finally, entrepreneurship is gaining the recognition it deserves and has experienced a huge boom in the last few years – it seems everyone wants to be an entrepreneur these days. We are the new hero; children at school are hoping they can be an entrepreneur one day and this makes me so proud.

Mirco and small businesses are an integral part of communities and should be given all the support and guidance they can get. That’s why I’m writing this series of columns.

No matter who you are or where you come from, starting a business isn’t an easy ride. It is completely new to you and you will undoubtedly experience many different emotions during your journey.

Starting a business is the hardest job you’ll ever do. There will be times where you’ll want to throw everything away and give up, and other days where you’ll sit back and think just how happy and content you that you’re working for yourself, doing something you love and giving something back to your community.

But, first things first, we need to establish whether your idea is really a business.

I’ve met many entrepreneurial creatives whose heads are swimming with ideas; they’re constantly writing down new business concepts in the hope they’ve found the golden ticket. The only issue is they don’t take the time to figure out whether the idea is actually profitable.

At the end of the day, a business needs to run and the only way this is going to work is if you have a profitable idea. Instead of getting carried away in the excitement by thinking this is really going to work, take a moment to consider the practicalities of your idea.

I’m not raining on your parade, and will always encourage creativity because I believe the ideas that spark passion and enthusiasm from day one are the ones that will give you enough commitment to carry you through all the ups and downs of the process.

Throughout this series I will be sharing some of my expertise in the hope you avoid making silly mistakes and have a better chance of starting a successful business. However, the one thing I can’t give you is an idea. That’s your job. I’m just here to give you the tools to execute it properly.

The first, and most important, question to ask yourself is where is the demand? Is there a need for your product or service in the market and if so, who’s going to buy it?

If you can’t answer this question with a well thought out, researched and detailed answer then you’re probably not ready to start up. There’s no point spending all this time working on an idea then realising there isn’t a need for it. Your idea needs to solve an existing problem in your chosen market, a problem which is shared by your target audience, not just a problem you’ve made up.

Make sure your idea has the potential to be a viable business, not just a hobby.

People are always obsessed with thinking of a unique idea – something nobody else has ever thought of. The truth is this is almost impossible because every market is quite saturated, and it’s pretty likely that someone, somewhere, is also thinking about your “original” idea too.

My advice to you is, don’t waste too much time worrying that your idea isn’t unique enough, take something existing and make it better. Give your customers something they can’t resist and make it better than your competition.

Remember that your first idea doesn’t have to be your best idea. It’s only your first idea. Learn from your experience, move on and concentrate on finding the right idea.

Up next: Step two in your startup journey is research analysis and my next column (published on 21 October) will discuss what and how much research you need to do in order to be successful.

And remember, if you have any specific questions for me then please don’t hesitate to get in contact with the Business Advice editorial team.

Sign up to our newsletter to get the latest from Business Advice.


 
TAGS:

ABOUT THE EXPERT

Renowned investor and business builder James Caan is currently the founder and CEO of Hamilton Bradshaw, a firm specialising in buyouts, venture capital, turnarounds and real estate investments. Prior to that, he was one of the longest-running investors on BBC television show Dragons’ Den, founded and exited recruitment business Alexander Mann and was the chairman of the government’s Start Up Loans initiative. His efforts were recognised when he was awarded a CBE for services to entrepreneurship and charitable services through the James Caan Foundation.

Q&A

If you’ve found the article above useful, but have a more detailed and bespoke question, then please feel free to submit a query to our expert. We at Business Advice will get in contact with them on your behalf and arrange for a personalised response. These questions and answers will then be collated on the site for any other readers who have similar queries.

Ask a question

On the up