Your Business With James Caan 2017 - 98
James Caan answers your burning business questions
How do I know if my
business idea will work?
The first, and most important,
question to ask yourself is where
is the demand? Is there a need for
your product or service in the market
and if so, who's going to buy it?
If you can't answer this question
with a well thought-out, researched
and detailed answer then you're
probably not ready to start up.
There's no point spending all this
time working on an idea then realising
there isn't a need for it. Your idea
needs to solve an existing problem in
your chosen market - a problem that
is shared by your target audience, not
just a problem you've made up.
My idea is not unique.
Is this a problem?
People are always obsessed
with thinking of a unique idea
- something nobody else has ever
thought of. The truth is this is almost
impossible because every market is
quite saturated, and it's pretty likely
someone, somewhere, is also thinking
about your "original" idea too.
Don't waste too much time worrying
that your idea isn't unique enough
- take something existing and make
it better. Give your customers
something they can't resist and make
it better than your competition.
I am worried about doing
the costing for my business.
What should I do?
You don't have to be a
spreadsheet genius to work out
the costs of your business. You can do
your business forecasting on a piece of
paper, without Excel. Because I'll let
you into a little secret: doing the
costing is a piece of cake.
Let's say I'm planning a business
selling insurance. I find a piece of A4
and do a monthly breakdown. In
January I'm going to employ Bob,
Steph, John and Suzie, and I'm going
to pay them each £2,000 a month.
So that's £8,000 a month. With rent
at £1,000, printing costs at £500,
phone bill at £100, stationery at £75,
and various extras, my costs in
January are £10,000. The income
that month is £12,000, so that leaves
£2,000. Doing a costing is easy. It's
just money coming in as revenue or
money going out as costs.
Can I be a part-time
I personally don't believe
in the idea of a part-time
entrepreneur. It's a bit like hiring
somebody to work three days a
week: they never gel within the team,
and problems and crises tend to
occur in the two days they're not
there. If you only put a bit of
part-time into a business, you're only
going to get a bit of part-time out -
you won't see it rocket upwards.
At what stage should I get
my first order?
The best way to prove you're
ready to secure an investment
is to have an order in place.
Investment readiness is when you
have compelling information from
third-party references that confirms
the viability of your business
opportunity. And the very best
third-party reference is an actual
order from a paying customer or
client. The moment you have an
order in your hands, your chance of
securing an investment leaps from
10% to 90%.
I need to set up a meeting
with buyers. How should I
pitch my idea?
When you meet the buyer,
what you - as the creator of
the idea, the inventor of the product
- bring along is the passion and the
focus. Customers buy the people
first, before they buy the product.
If you come in to see me, I've got
to buy you first. If I don't click with
you - if I don't connect - I'm not
interested. You rarely buy products
from people you don't trust, people
you don't connect with, people you
don't like. Even if you like the
product, if you don't like the person
who is trying to sell to you, you
won't buy it.
I don't believe you can start a
business if you're not passionate
about it. Don't put pitching off to
the end of the process, because
however long you leave it you are
still going to have to go out and do
exactly the same thing.
I have everything in place
for my business but I don't
know how to market it. What
should I do?
There are thousands of great
ideas out there, but if the
marketing is weak they'll struggle
to survive. Unless you've worked
out a real angle, I wouldn't touch
the idea. I need to hear specifics:
"I've spoken to this website." Or
"I've worked out what the cost of
marketing will be. I've worked out
what the pay-per-click is. They
are telling me if I get this many
clicks, it will turn a profit."
Or I need to know if they have
spoken to a distributor who says
that if they can deliver the product
to him for a certain price, he will
take it on. I need to know they
understand the issue. I need to
know they recognise the challenge,
because so often it is the cost of
getting the product or serv ice to
market that prevents you from
making any money out of it.