Harrell on treps & new Ideas

There are no stupid ideas; there are just unprofitable ones. In order for an entrepreneur to be successful with his new idea, he must understand that the idea, alone, doesn't win the day. Rather, a considerable amount of due diligence must be done to refine that idea into a workable business model and a plan for execution. 

That is right: the entrepreneur has to do his share of homework, and in doing so, he has to develop a plan that enables him to fluently answer a number of questions. Here are just the least of those questions:

---What does it take to bring your offerings to the market?

---Have you mapped out an effective supply chain and established relationships with suppliers and vendors?

---Do you have a holistic understanding of your startup costs?

---What is your plan for the distribution and placement of your offerings?

---What is your revenue model? Who is the buyer (or target market) of your offerings, and how will they be paying you?

---Does this market already exist?

---How do you plan to reach these potential customers? What does your brand look like? What about your message?

---What is the competitive landscape like? (Note: there is no such thing as "no competition".) Is there a high or low barrier-to-entry for any likely competitor seeking to gain marketshare?

---What differentiates your offerings from that of the competition?

---What is your sales strategy?

---Can you commit the time, energy, and resources necessary to operate a new business?
---How will you expand your market reach, in order to grow sales and scale your business?

---Can you sustain and grow cash flow?

---Will you need outside financing? Are you creditworthy, and do you have inroads to potential lenders or investors?

The would-be entrepreneur can often be a bit egotistical when it comes to his coveted idea, but a failure to delve deeply into the mechanics of that idea, or a failure to listen to early suggestions, can prove very costly. In fact, the entrepreneur would be well-served to welcome challenges to his ideas, because, if an idea cannot convincingly overcome scrutiny, then that idea probably is not a good one. What's more, if the idea goes unchallenged, then the entrepreneur may just execute it, only to have a less-than-forgiving market drive it into the ground. Such is the case for the 80% of new businesses that, according to Bloomberg, fail within their first 18 months of operations.