2.1 The business idea
In this section you will begin to look at your idea in detail, to consider its feasibility and the perspectives of some of the others who will be interested in the viability of your idea, including any rural perspectives.
To have the power to attract, convince and motivate people with wildly divergent interests – such as customers, consumers, investors, employees, suppliers, distributors and so on – the idea must be innovative, legitimate and viable. It must offer something new, something of value to some or all of these interested parties (often called stakeholders), and its first essential step is that it must attract someone, or some team, committed to making it happen. The person who is committed to undertaking the idea we can call the entrepreneur.
However, commitment is not enough. To become reality, ideas need resources – physical, financial and intangible (such as experience, knowledge and, sometimes, legal rights to use processes and products). A key part of the entrepreneur’s job is to obtain the capital to acquire those resources.
When developing a business we draw on a range of complex capital inputs. For example, our own skills and those of anyone we employ is called ‘human capital’, our networks and connections are ‘social capital’, and the effect on the community in which we operate will be around ‘cultural capital’. Social and cultural capital might be particularly important when considering a social enterprise such as promoting inclusion for vulnerable adults, or promoting the local culture.
Many small rural businesses start with just one person, the business owner, perhaps working part-time alongside another job at the beginning. It is certainly possible (although hard work) to continue like this, even when your enterprise becomes ‘full time’. However, even if it’s just you in your business, it does not exist in isolation, it is still part of a network, where often businesses depend on each other.
Most businesses grow sufficiently so that they need to employ another person or even a group of people. It is the actions of these people that will translate the idea into a product or service. However, they do not all need to work for you. You might make a product, but you do not have to market it, or distribute it: you can employ others to do this for you. In the end you might not even end up making it yourself either but instead decide to outsource the production to someone else.
Finally, the products developed from the idea need customers and consumers who want them and are prepared to exchange their hard earned cash for them. Often you can make an enterprise succeed by meeting a local need or you may be targeting a wider market. Whatever your scale, it is likely that your business idea will have to be strong enough to secure the finance, skills and other business support to help your idea develop through to fruition. That does sound daunting, but often what is distinctive about your product or idea might be the values that lie behind it or even the location. Thus, a community owned or local shop might be expensive or stock a small range of products, but for rural residents that cost may be set against travel costs they might incur by having to travel elsewhere to shop, and they might also place a social value on supporting their local shop.
Task 7: The business idea
To be confident that your idea is strong enough to succeed in its competitive market, you will need to provide robust answers to the following questions (which, at this stage, you may find difficult – but you should have a much clearer idea by the end of the course):
- In one sentence, what is your business idea?
- What unique or distinctive features characterise it?
- What types of customers are likely to be attracted to its benefits?
- Potentially, how many customers are there?
- Are enough of them willing to pay the prices or fees to cover all your costs and provide you with a reasonable living?
Write down your answers (even if they are just initial thoughts) so that you can refer to them later.
Share your thoughts with other entrepreneurs in your local networks.