18 Aug 2020
On 24th August 2019, I had a chance to attend Arusha Sparks, an event concerning the fourth industrial revolution, which was organized by Sahara Ventures, an innovation company and Obuntu hub, a social enterprise that empowers young entrepreneurs in Arusha City. The event had a pitching session, where different young people were pitching their business ideas to the judges, and the winner would get an opportunity to secure funding. After pitching their ideas, the judges had time to discuss and the winner was announced. According to my understanding, I thought all the ideas were amazing, and of course, they were good ideas, but what makes the idea of a winner more acceptable to the judges?
Earl Nightingale, an American writer, once said, "Everything begins with an idea".It is a truth we cannot deny that ideas are inputs of our daily lives. Whatever we do with our hands is a result of our brains to process ideas and give a go-ahead to the body to implement the idea. Computer ideas can be related to software that runs the whole body of the computer. The computer without software or operating system cannot execute any action or give output. Whether you want to marry someone, start your business or go to Hawaii, you need to have an idea. Our life is the results of our thoughts and ideas.
In entrepreneurship, having an idea is the foundation of creating a business, but having a good idea is the cornerstone of creating a business that is profitable, sustainable and has positive impacts on the lives of people. All big companies started as ideas and grew up to the level of reality. What hinders an idea from being executed is a failure to execute an idea. Apple in 1976 was just an idea of Steve Jobs and Wozniak, Sahara Venture in 2016 was just an idea of Mr. Jumanne Mtambalike, Empower Limited in 2009 was just an idea of Miss Miranda Naiman, and My Elimu in 2014 was just an idea of Mr. Given Edward. As of this day, we no longer have what we thought as " ideas" but institutions and companies which are revolutionizing the way of doing things and are making a huge impact on society.
According to the National Science Foundation, an average person has ideas between 12,000 to 60,000 ideas per day, 20 percent of these ideas are positive, while 80 percent are negative (Refer to Figure below). With those numbers, it is hard to filter and get the right ideas that can have a monetary value. As entrepreneurs, the issue is not only ideas but the right ideas that have financial gain. The ideas which have financial gain are called "business ideas". A business idea when written down with supportive resources and information to support it turns into a business plan. A business plan can be transformed through a series of systematic steps to turn it into a sustainable business, solves problems of people, and is making a profit.
How do you produce a smart business idea?
Generating a business idea is not very hard as it may seem. There are many ways you can create a business idea from a pool of ideas within your head. Some of them are as follows;
The problems you are personally experiencing in your community or the challenges you see in your country may be the idea you are looking for. Go around your city, observe, ask, and try to figure out the biggest problems with no solutions that people are facing. It may be a lack of a shop that provides basic needs in your street or a long-distance well people use to go to fetch water. All those are challenges that, if well utilized are opportunities in disguise. I once read the book called "Screw it, Let's do it", by Richard Branson, and I was amazed to find out that he got an idea of starting his Airline Company in 1984 when his flight from Puerto Rico to the Virgin Islands was canceled. The problem he faced was the beginning of a journey to create Virgin Atlantic
I love traveling, and I hope you also love traveling and exploring new places, cultures, and lifestyles. Traveling and experiencing new environments, meeting new people fills your head with new ideas and opportunities. The idea of Uber started when Travis Kalanick and Garrett Camp were unable to get a taxi on a snowy evening while they were in Paris. This incident gave birth to Uber, a company which has a value of 75.5 Billion Dollar as of May 2019. The value of Uber is bigger than the value of Ford and General Motors combined. For any person who wants to get new ideas, traveling is important.
Build a habit of walking with a notebook and a pen to write down your ideas. We are surrounded by millions of ideas but if we don't dump them on paper, we easily forget to work on them. An idea when written on paper it becomes a plan. A plan makes you think of a strategy to implement it, and the idea can turn into a business.
Hobbies and interests
What do you like? What is a hobby? Those questions are easy but will make you reflect and understand what business idea you can come up with, which is also your hobby. To answer those questions, you must be fully aware of your inner power. A hobby is something that you enjoy doing, and you spend much of your extra time doing it. Are you spending three hours of your day writing, swimming, coding, reading novels, playing football, or hiking?
There is an easy way to find your hobby if you can't see what you love. Take a pen and paper then draw a table with two partitions. On your left hand, write activity and on your left hand write time. Take time to reflect on your whole schedule from morning to evening, observe all activities that you do, and write them with their respective time you spend on doing them (you can use even a whole week to study your routines and fill the table). After filling it, you will observe that there are activities that automatically take much of your time, and you enjoy doing them. Those are your hobbies now, invest much of your time to learn them and monetize them so they can transform from hobbies to businesses.
Focusing on your strengths.
Knowing the person within you makes you in a good position of utilizing your inner strengths to transform them into an idea that can give birth to a sustainable business. To understand this, you are required to carry out what is commonly known as SWOT analysis. SWOT analysis is a planning technique used to help a person identify strengths, weaknesses, opportunities, and threats. Once you have analyzed yourself and determine the areas where you are strong then you can start working day and night to strengthen your strengths and transform them into an idea that can have monetary value and add value to the lives of people.
Components of a smart business idea.
Three key components can help you filter your ideas and get the best business idea out of many ideas you have;
Your business idea should be the one that solves the problem of people, organizations, or society. The ability of your idea to solve the problems, create a demand for consumers of your product or service. Having a demand from customers means the ability to get customers who are willing to pay for your service or product and are also able to pay for your product or service (Refer to figure below). It is not enough to have people who are willing to pay, but they should also have the ability to pay. As an entrepreneur, your focus should not be on followers or fans but customers. Followers and fans may be willing to pay, but only customers are willing and able to pay for your product or service.
A business idea must be sustainable. Sustainability of a business idea means an ability of a business to continue to solve the problems of people at a constant rate over time with the same level of quality and meet the expectations of the consumers. A business idea comes not fully formed, but as you progress working on it, you advance depending on the changes in technology or behaviors of the consumers. For instance, the Facebook version of 20012 is different from the Facebook we use today. The idea of Facebook has not changed, but the improvement has been made depending on the needs of the consumers, business competition, and the advancement of technology. The ability to constantly innovate new ways of improving your idea will make your business sustainable and more appealing to your consumers.
A business idea that doesn't create o stream of revenue doesn't qualify to be a good business idea. The main aim of any business is to solve problems in return to money. No matter how your idea is if there is no way you can add cash to your account through your idea and make a profit, then the idea isn't good enough. It is not necessary to make a profit in your first year of business, but there should be "signs" of getting profit in the future. Does your idea have a stream of income? Will it make a profit? All those questions are necessary before you decide which idea to pick.
There is no point in doing business that doesn't make a profit in the long run. The best way of understanding whether your idea will make a profit is to conduct market research and see how people are responding to your product or service. The research will give you a big picture of where your business will be in the next ten years. Do a business that will impact the lives of people and generate a sustainable stream of income.
After having the smart business idea, you need to have the three components for your business to take off successfully. IMAR framework helps an entrepreneur to understand the elements of a business in a logical order that will help him /her. IMAR is a short form of an idea, motivation, ability, and resources. Let's discuss the three other components which are motivation, ability, and resource;
Motivation is a desire to see your business succeed in the long run and make a sustainable profit despite the challenges on the way. After having your smart idea, now you need to ask yourself important questions concerning your motivation towards implementing your business idea. There are two types of motivation, internal motivation, and external motivation. The driving force of your business idea is not the motivation you get from motivation speakers or the movies you watch, but the internal motivation that is within you. The inner power that gives you a reason to fight for your idea is what will make you implement your ideas and turn them into reality.
Once you have the idea and the strong motivation, then ability comes. Ability means having the necessary skills and knowledge that can help you to make your idea a real business. You might be having an idea that requires some skills of Java or python language for it to be successful. The strong motivation you have will give you the power to learn the skills which are needed or find people who can help you to make your idea come true. Not having the necessary technical skills, is not an excuse for your business to take off. Learn the skills required or build a team of people who have the technical skills you need and start working on your idea. It is important to have soft skills that will create an unbreakable bond between you and your team of technical experts. Technical skills make the product, but soft skills make the real connection between the team and influence the success of your business.
The last part of the
IMAR framework is the resources you need for your idea to turn into a business.
Resources include people and capital. Building a team of people that have
different skills and experiences is a component of a great team to work
together successfully. There are many ways you can use to fund your idea, such
as pitching your business idea to angel investors, personal savings, and
participating in global business competitions. At this stage, an entrepreneur
must have a complete business plan with details of the business and the
business model canvas which will assist him or her to understand the flow of
the business from producer to consumer, and the resources needed for the
business to take off.