You’ve Got a Business Idea. But Does It Actually Stack Up?

Having an idea for a business is the easy part.

Working out whether it is an opportunity worth pursuing is something else entirely.

It is very easy to become attached to an idea. You can picture the product or service, imagine who might buy it and start thinking about the name, the website, the marketing and everything else that might bring it to life.

But before investing too much time, money and energy, there is a more fundamental question worth answering:

Does the idea actually stack up?

That requires more than enthusiasm. It requires investigation.

Start with the opportunity, not the business plan

Business plans get a lot of attention when people talk about starting a business. They are important, but there is a step that logically comes first.

Before developing a plan for how a business will work, it makes sense to investigate whether the opportunity itself is worth pursuing.

That means asking questions such as:

• Who is the customer, and what problem are you actually solving for them?

• What evidence is there that people want or need what you are proposing?

• What alternatives are already available?

• Who are your competitors, and what can you learn from them?

• What is happening in the market?

• What would make your proposition different?

• Does the opportunity fit your own skills, circumstances and objectives?

You may come out of that investigation more convinced than ever that you have something worth pursuing. You might discover that the idea needs to change. Or you might decide not to pursue it at all.

That last outcome can feel like failure, but it doesn't have to be.

Finding out early that an idea doesn't stack up can be an extremely useful business decision.

If the opportunity stacks up, then you need a plan

Once there is enough evidence to justify taking the idea further, the questions change.

You now need to work through how the business could actually operate:

• What will the business offer and what resources will it need?

• Who are the customers and how will you reach them?

• What will you charge, and what will it cost to deliver?

• What legal and regulatory requirements apply?

• What are the major risks?

• How much money will you need and where might it come from?

• What happens if some of your assumptions turn out to be wrong?

This is where a business plan becomes useful.

Not simply because having a business plan is considered something a new business should do, but because of the thinking required to produce one.

Researching the market, testing assumptions, considering resources, working through the numbers, identifying risks and making choices forces an idea to become much more concrete.

The value isn't simply in having the document. It's in doing the work required to develop it.

For some people, that may be exactly what they need

Not everyone exploring a business idea needs to undertake a full entrepreneurship qualification.

Someone may simply want a structured way to investigate an opportunity properly and develop a researched business plan before deciding what comes next.

That's where Connect Business Academy's Micro Business Skill Set (BSBSS00102) can fit.

It brings together two units: Investigate business opportunities (BSBESB301) and Research and develop business plans (BSBESB401).

The focus is deliberately practical: investigate the opportunity, evaluate what you find and develop a business plan based on that work.

For someone testing an idea, considering self-employment or exploring a small-business opportunity, that can be a logical place to start.

Going from an idea to a business requires more

If you decide to take the idea further, there is considerably more to work through.

Most ideas start to look different once you put some numbers around them. What will it actually cost to establish and operate the business? What will you charge? How much do you need to sell? Where is break-even? What happens to cash flow if sales take longer than expected?

Then there is the question of customers. Having a good product or service doesn't automatically mean people will find it, so you need to think about who you're trying to reach, how you'll reach them, what competitors are doing and how you'll know whether your marketing is working.

There are also legal and regulatory requirements, financial and operational risks, and assumptions that may turn out to be wrong.

None of these things can remove the uncertainty involved in starting a business. But working through them can help you make decisions with more information than the original idea alone.

This broader development sits behind Connect Business Academy's Certificate IV in Entrepreneurship and New Business (BSB40320).

Across the program, participants investigate opportunities, research markets and customers, develop business plans, work through financial requirements, develop and review marketing activity, consider legal and business risks and make decisions as circumstances change.

Importantly, they don't achieve the Certificate IV simply by learning about these things. They are required to apply their learning and demonstrate what they can do.

Start where you are

The Micro Business Skill Set and Certificate IV aren't competing options. They suit different stages.

If you have an idea and want to investigate whether it's worth pursuing and develop a properly researched business plan, the Micro Business Skill Set may be enough.

If you're ready to go further and want broader development across investigating, planning, establishing, marketing and operating a new venture, the Certificate IV in Entrepreneurship and New Business goes further.

There is also a natural pathway between them. The two units within the Micro Business Skill Set are included within Connect Business Academy's Certificate IV. Someone who completes the Skill Set and later decides to continue can therefore carry those completed units into the Certificate IV through the normal credit-transfer process.

So you don't necessarily need to decide at the beginning how far you want to go.

Start with what you need now. Then decide what comes next.

None of this guarantees a successful business

This distinction matters.

Neither program can tell someone that their business will succeed. They can't guarantee customers, funding, revenue, profitability or growth. Nor can they remove the effects of competition, economic conditions, timing, access to capital or the decisions made after the program is completed.

That's not what entrepreneurship education should promise.

The Certificate IV develops and assesses the practical skills involved in investigating, planning, establishing and operating a new business. It doesn't prove that someone will successfully build one.

What structured development can do is require someone to research the opportunity, test assumptions, work through the numbers, develop a plan, consider customers and competitors, understand risks and make more informed decisions.

Perhaps that's a more useful way to think about preparing to start a business.

Rather than asking:

Can someone teach me how to build a successful business?

Ask:

What do I need to work out before I decide whether this idea is worth pursuing?

Because a good idea can be a great place to start.

But eventually, the idea has to stack up.

Ready to test your idea?

If you're at the stage of investigating an opportunity and developing your business plan, the Micro Business Skill Set (BSBSS00102) provides a practical place to start.

If you're ready to develop broader skills for establishing and operating a new venture, explore the Certificate IV in Entrepreneurship and New Business (BSB40320).

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