You’ve Got a Good Idea, But Is It a Business Opportunity?
A few tips on how to find out
Canaan Heard is a small business owner, scientist, guest lecturer and a part owner of his family’s business, Faulk’s Game Calls. He is passionate about Louisiana, investing and small businesses.
With the pandemic and changing economy, more Louisianians are thinking about creating a business or are in the early stages of running one. If this sounds like you, you may have ideas on what kind of business you want to start or what problem you want to solve, but how can you know if your idea is a solution that people will pay for? What makes something a real, viable business opportunity as opposed to an expensive hobby? The answer lies in basic market research.
To get a full understanding of your business idea, a great place to start is by polling the people you know. Share your idea with anyone and everyone you know and ask them if it would be a product or service that they would find beneficial. If they say yes, ask them how much they would think would be a fair price. Don’t be afraid to ask people to play devil’s advocate and poke holes in your ideas and assumptions. You can then use all the information you receive to improve your idea as needed. The important thing to remember here is that you need to take your time. This process should take a few weeks — don’t try to cram it into a few days. Rome wasn’t built in a day, and neither are businesses.
If at the end of this process you still think your idea can be turned into a business, then it’s time to map out a future for it. Start by creating a budget, timeline and a plan of action. Your budget should include basic items like what you will need for insurance, product development, office space if needed, taxes, etc. Remember that every business is unique, so budgets can look very different.
Once you’ve mapped out and created a budget, you need to finance it. Fortunately, there are lots of ways to do this. Depending on the stage of your idea or business, funding can be found by using personal savings, asking friends and family for a loan, and reaching out to angel investors, family offices, venture capitalists, or private equity firms. Each group generally has their own criteria for investments or loans. Remember, depending on whom you approach for financing, you may have to give up some ownership.
Early-stage investors can be valuable not just for their financial contributions. Generally, they also serve as a mentor to a founder who can benefit from that person’s skills, suggestions and their network. According to Forbes.com, 90% of startups fail, so startups need to welcome all the help they can get. Having a solid network of people who’ve started and run companies before can be the difference of whether you become a success story or just another statistic.
Here in Louisiana, our talent is leaving and starting businesses in other places. One of the biggest messages I want to put out there is that you don’t have to have attended business school to start, or run, a successful business. Business school is great, but people of all backgrounds and levels of education have ideas that can be turned into businesses. Most just don’t know what to do or where to go.
Fundraising for and investing in startups is taking hold in Louisiana. Angel investor groups are springing up throughout Louisiana and its helping to make an impact on the local economy. New Orleans, Baton Rouge, Lafayette, Lake Charles and Shreveport all have angel investor groups. Entrepreneurs pitch to angel groups in hopes of getting an investment.
The best way to meet investors is networking and building good relationships. New Orleans hosts New Orleans Entrepreneur Week, which is attended by business owners, entrepreneurs and investors. Most universities have business pitch competitions as well. Investors attend these events to meet entrepreneurs and small business owners.
Startups are keeping Louisiana’s best and brightest in the state. One such example is Logan Meaux, a Louisiana native who founded Mallard Bay — a Baton Rouge-based startup that allows users to book a hunting or fishing trip online with vetted guides and charters — after he booked a poorly guided hunting trip.
I got my start in the business world by taking the medical research I did and turning it into a training business. I started training people in my garage in Baton Rouge. I kept at it and slowly added more services.