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CHAPTER 1 THE IDEA > WILL YOUR BUSINESS MAKE MONEY?

WILL YOUR BUSINESS MAKE MONEY?

We will produce a plan in the next chapter, but it is important that you begin to develop a knack for working out whether your idea is likely to make money from the outset. All good small business owners develop this skill early on. It prevents you from making poor decisions, stops you fooling yourself about likely success, and is invaluable when you introduce new ideas post-launch. Here are some money-related points to consider:

  • Concentrate on the money, but don’t become obsessed with it Wandering round with a spreadsheet all day won’t get the business under way. If the idea is sound then the money will follow. Don’t just go for cash as an objective – it will prove unsatisfactory in the long run.
  • Weigh up the Service v. Product distinction Are you offering a service, a product, or both? It is important to look at the distinction between the two. A product is tangible. A service involves interaction that often goes beyond the moment of purchase. As we saw in the plumber example, a combination is acceptable so long as you know what percentage is coming from each.

  

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