FAQ

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 to 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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