Business Strategy 101: The 10 Questions You Must Answer Before You Are Allowed To Have An Idea

Momentum is a very hard thing to break.  As a consultant, I often see new, shiny ideas pull a company's people,  money and energy away from more important things.  We've all seen it happen. Someone gets an idea for a new e-commerce business imitative that's going to change our lives or transform our company.  Somebody buys a cute URL and thinks that they need to put a business model around it.  Or, a competitor does something.  Drop everything. We have to start working on this NOW.

The mindset above has been the mother of many great ideas that have indeed changed the world and transformed companies.  But that same mindset has been the mother (and this time I mean mother in the broadest sense of the word) of crippling distraction and execution embarrassment.  The tragedy is that so much of it could be avoided, if only we had a 10 Questions Filter surgically implanted that would shut off our ability to deploy resources if an idea didn't pass go.  But, alas, too many times the train leaves the station, comes partway off the tracks and the consultant cavalry gets called in "....well, we started this thing  and we invested some money and we need to get back on course and we don't know where to start...."

Now, it's totally OK for the answer to these questions to be " I don't know" or " I haven't figured that out yet".  But at least you'll know what you don't know, and you'll know what you still have to figure out, which is better than where you were before you answered the questions.   

1. Who is this for?  What does the target customer group(s) look like? What are their needs? How are those needs being met/not met today?
2. What's the value proposition?  Why would customers spend money/time with you and you only for this?  If you're dealing with both customers and suppliers, there needs to be a compelling value proposition for both of them.  Does the value proposition enhance or conflict with other aspects of your business (assuming you already have a core business)?
3. What's the business model?  How will you make money? How soon will you make money and how much? How do you validate the viability of the model?
4. How will you measure success? How will you know if it's working? What are the key performance metrics and benchmarks you will use?
5. How will you source and manage inventory?  Is it physical or digital? A product or a service? Is there a cost associated with the inventory and how will it be procured and managed?
6. What's the fulfillment & service model?  How will you get the product in the customer's hands?  How will you communicate with customers regarding service matters?  Is there infrastructure and staffing in place to scale the business?
7. How will your customers find you?  How will you approach marketing and how much will it cost ?
8. Who's going to do it?  What kind of staff do you need to do this? Not just starting it, but running after it starts.  Are there specialized skill sets needed?  How will you find them? Who's going to lead this once it's up?
9. Where's the money, and how much do you need?  Will you be seeking outside investors? Will someone need to approve the funding? How much do you need and how do you plan to get it?
10. What's the end game?  Do you have an ultimate goal? Is there an exit strategy for you or are you in it for the long haul?

If you can't answer these questions and/or you don't have the time and patience to answer them, then you can't answer the last really important question: Is this better and more important than what we're already working on? In other words - what am I willing to give up to get this done?

Not able to answer all of the questions? Ask yourself if your idea really deserves to get traction yet. Or, if it already has traction, how in the world you're going to keep it.