(This is number 6 in my list of top 10 startup mistakes.)
A business idea is not necessarily a real opportunity. You need to filter those business ideas, sifting through them, looking for the opportunities.
What’s the difference? An idea is just that. It has no value unless you make a business out of it. An opportunity is an idea that can be implemented, for which resources are available, that will prosper.
Opportunities are far rarer–and way more valuable–than ideas.
Business planning is a great way to filter the ideas and find the opportunities. Take the idea and lay out the basics, like starting costs, realistic sales, costs of sales, expenses and such. Take a good, hard look at the market, what the real needs and wants are, and whether or not people–enough people–will spend money on it. Think through the resources required. An idea becomes an opportunity when you can act on it.
Very few startups succeed or fail because of the business idea. It happens, but it’s rare. For every new-idea-based business, there are tens of thousands of new businesses based on giving people more value or better value or something they like better, somewhere it’s easier to get to, or get to more often.
So business ideas are great, hooray, but not really what makes the difference. Make sure you have an opportunity, not just an idea.
Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry.
