South-Western - Management  
You Have a Great Idea. Now What?
Topic Entrepreneurship
Key Words Brainstorming, research, new business ideas
News Story

Many entrepreneurs get a brainstorm about a product or service and make the mistake of jumping into their new business right away, without doing much pre-work. Mike Collins, CEO of Big Idea Group Inc., a company which helps match inventors with others that can market their ideas, sees this all the time. He says that the most important thing someone with a new business idea needs to do is to research the market for the idea extensively before jumping in to make their idea a reality. Prior to investing significant time and money, an entrepreneur should do the following:

1. Find out if it's really a good idea: get a reality check by canvassing a wide group of people already in the industry. Some entrepreneurs hesitate because they are afraid that someone will steal their idea, in actuality a very rare occurrence. Others become so enmeshed in the details of their idea that they can forget the big picture. It is also critical that an inventor get the opinion of the potential end user to know if their product or idea stands a chance at success. For example, if an invention has to do with a new diagnostic approach in women's health, the inventor needs to talk to doctors to see if they would use the novel approach.

2. Know why you want to pursue the idea: what is your reason for going into business? Is it money that you are hoping to gain or a lifestyle change? Inventors are better off selling their ideas to others to implement them while entrepreneurs are better at building an organization. For example, Jennifer Appel was a clinical psychologist who found her job stressful and draining. She baked cookies and muffins in her spare time for her own enjoyment. Eventually, she thought about going into business and opened her own bakery, which she is about to franchise. She was successful at running the business because she wanted the lifestyle change to do something she loved, not just the chance to sell her recipes and ideas to others.

3. Figure out if anyone else has already done it: Identifying your competition is a critical step to becoming successful with your idea. This research can be done at a very low cost utilizing the Internet.

4. What are the potential pitfalls: Knowing what you might charge for your service or product is important early in the process to help you to determine if the idea actually has merit and will sell.

Questions
1.

What are the four key questions entrepreneurs should ask and answer before they get started with marketing a new idea, service, or product?

2.

You are an entrepreneur with the idea to open a business that will come to people's homes and help them to solve their home computer problems. Using the four steps outlined in the article, what do you need to do before you can make your business idea a reality? Be prepared to discuss the process in class.

Source "You Have a Great Idea. Now What?" The Wall Street Journal, May 9, 2005, pp.R1,R3.
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