The 30th of December 2014 will mark the 4 year anniversary of co-founding my first company. Over the last three and a half years, I’ve learned several lessons about starting a business. Most importantly I've learned the process by which an idea is commercialised into a business.
It's my view that everything in our society operates according to commercial principles: from organised religion: to politics and family dynamics.
These commercial principles are deeply rooted in human survival. If you don’t eat food, you will die. Thus it is very important that you go out and gather, cultivate, or hunt for food.
In reality humans exist in societies, enabling people to contribute in different ways, one building a shelter while another procures food. Our modern society is much more complex and we have developed an accounting tool called money. This money enables individuals to show their support for activities by buying goods and services. In some ways each unit of money is like a vote that is used to organise people and make things happen.
Contrary to popular belief, a business isn't about making money but about addressing a need. A business is just an organisation that is focused on accomplishing objectives. Profit from a business is a resource stockpile that insures the sustainability of that organisation over time. An abundance of profit or ‘resources’ shows that people support the organisation. This allows the business to expand and address needs on a greater scale.
So how do these ideas relate to your business journey? It lays out a few important questions:
1. What are you trying to accomplish?
Can you clearly articulate the need and objective? Try pitching your business idea to yourself by recording it on your phone. Watch the play back – you may be surprised at what you hear.
2. Can you gather the necessary resources to achieve your objective and address the need you have identified?
Resources are collected based on the desire for the need to be met. Resources can be gathered in many ways like debt or equity financing. However the most sustainable source of resources is created through sales. This is when individuals want their needs to be met and buy the companies product or service.
These two questions can be your guide through your business journey: What do you think the need is, do people actually need it? Is there sufficient numbers of people wanting this need to make solving it viable?
If you identify a need and know there is a demand for it, then research the supply side. It might be a case that there is already a solution to the problem you have identified. Is the solution satisfactory? Could you solve the problem better?
Once you understand the basics, an exciting journey lies ahead: gathering resources through fundraising and/or sales; developing a product and service; ensuring your solution is known to the market so people can make use of it; optimising and scaling your business to improve efficiency and impact.
The simple question is: "Do people need what you are providing?"
