What to Do (and Not to Do) When Developing a New Business Idea
For entrepreneurs, there are few things as exciting as coming upon a great concept for a new business. When this happens it can often lead to an avalanche of ideas that may have you strongly considering what to do next. However how can you tell what’s a smart step to take and what amounts to putting the cart before the horse on your path from spark to actual venture?
If you’re considering starting a new business, here are a few guidelines for what you can do from the jump and what you should probably hold off on:
Reserve a web domain (but don’t hire a designer)
Sometimes your new concept idea will come in tandem with the perfect name for the operation, while other times that important detail may come to you further down the line. In either case, when you do come across that perfect moniker, there’s little harm in securing a URL and various social media accounts to go with it. That’s because, in most cases, you can purchase domains for as little as a few dollars a year, meaning there’s little financial risk should you eventually abandon the idea. Just be sure to turn off any auto renewal options until you move forward with your idea so you don’t end up wasting money on a domain you no longer need.
Now, although securing an address for your website may be cheap, building out your site might not be. For that reason you’ll likely want to hold off on investing in long-term hosting plans or hiring a site builder until you give your business plan the green light. In the meantime, a parked page or even better a simple landing page will suffice.
Look into funding options (but don’t take out a loan)
As part of building your business plan, you’ll definitely want to consider how you’ll raise capital for your business and how you’ll fund future expansions. To determine this info you may want to look into various options such as SBA loans or those offered by online lenders. You can also decide whether you’d prefer a regular small business loan, which will give you a lump sum to start with, or perhaps a line of credit that you can access when you need capital.
While it’s a great idea to have a plan for where you’ll get the money you need for your business, you’ll want to hold off on actually applying for and securing the money until your plans are firm. After all, taking out an unneeded loan could be a truly costly mistake. It’s much better to just take notes on the pros and cons of each option so you’ll know where to head when you’re really ready for financing.
Browse location options (but don’t sign a lease)
Another exciting part of planning a new venture is finding a great space for your business to call home. Furthermore, if you’re looking to target a specific area or demographic, you may be tempted to immediately see what’s available. Once again, while browsing online or even talking to a commercial real estate agent about options is part of the normal business planning process, make sure you don’t fall too in love with any one space and convince yourself to sign a lease just yet. Even if you think you’ve found the absolute perfect spot for your business and want to ensure it doesn’t slip away from you, the fact is that renting a space before you have even a business to fill it could easily be the most expensive error on this list. In short: don’t do it!
Dreaming up a brilliant idea for a new small business can be thrilling. As a result there may be the temptation to essentially go from “zero to sixty” and rush through the planning process. Unfortunately this mode of attack can often lead to financial disaster should your idea fall apart before fruition or you end up changing your mind about certain details. For that reason, be sure to avoid ponying up big money for things like websites or leases until you have a 100% solid business plan from which to execute your (hopefully) million dollar idea.