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I have a new product idea.   What do I do now?

First, see if what you have in mind would sell if you had it.   Who would you expect to sell to?   (Buyers, wholesalers, retailers, catalogers, reps, distributors — not family and friends).   Go talk with a few: "If I had a product that would do such-and-such, would you be interested?   At what price?"   If it's a middleman you're talking with, get a feel for the markups (to end-user) involved.   See the articles Ideas vs. Inventions and Screening Ideas .   Second, get a feel for whether what you have in mind could be made at a low enough cost to yield a reasonable profit — as a first pass, figure 1/2 selling price.   If you still want to proceed, decide which path you wish to pursue — Licensing or Venturing.   For a low-cost approach to Licensing, see New Product Licensing .   For a low-cost approach to Venturing, see A Low-Cost Approach To Venturing .   Good luck.

I need capital. Where can I get it?

First question is whether you have a big-league opportunity, i.e., the business you have (or have in mind) has a real shot at growing to a $100 million business in a 5-year period — and whether you want to play this game, i.e., your primary motivation is to make a lot of money.   If so, you'll want to find a strong, well-connected Venture Capital partner that knows how to play in this league.   Most business service providers can point you to local VC firms, or you can find a directory of them in the library.   You'll need a good written business plan that sells them on two points: 1) that the opportunity is real , and 2) that you can pull it off.   See the article How To Target and Land Financing For Your Startup .

If this doesn't fit your situation, then you're stuck looking for private investors, or Angels.   This offers good news and bad news.   The good news is that Angels have a much broader range of motivations than the VCs.   Although they're interested in making money, that's not necessarily their sole — or even their primary — motivation.   The bad news is that they can be very difficult to locate.   See the article Midwest Lacks Venture Capital - NOT! .   You'll still need a good written business plan, but instead of offering fast-growth and a huge-return, you might offer a good-return and other "benefits" that might motivate prospective Angels, e.g., the "glamour" associated with a movie venture.

In either case, before you go looking for investors, be sure that's what you really want.   Using other people's money carries both some moral responsibilities and some "gun-to-your-head" tensions.   Be certain that you can not only live with that, but thrive on it.   There are alternatives — see Startup Financing — Why and How To Avoid the Investment Community .

I want to get out of this job and into my own business.   Where do I start?

Business — all business — starts with a customer — not with the "great idea".   The only value of a business idea is to give you an excuse to talk with potential customers to find out what they really want.   Take your best idea to your intended customers — "I'm considering offering a product/service that would do such-and-such at such-and-such a price.   Is this something that would interest you?"   And listen closely for responses like, "No, but can you...?"   If your idea is wanted — great — but it's much more likely you'll find your successful business in the "No, but"s.   See the article Finding Entrepreneurial Opportunities .

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