effective as far as to treating your business ideas. Your job as an entrepreneur/business person is to take an idea and turn them into something tangible that produces revenue and profit. IBBTTM stands for:
- Benefit to your customer
- Benefit to you and your business
- Time and cost to develop
- Time and cost to execute
- Maintenance on the back end to maintain your idea
9 out of 10 businesses fail.
Alot of this has to due with the lack of consideration people give to their idea. You need to look at all of these variables to just qualify that your idea has some legs to stand on. Here’s what happens all to many times. Someone has an idea, it’s actually not that bad of an idea. What happens, well it may take a million dollars and 18 months to develop (Time and cost to develop), or it may take little or no money whatsoever to develop, but you may need to hire 10 customer service reps to maintain the prodect or service (Maintenance on the back end).
So the benefit of using this process is it will save you alot of time and aggrevation and let you focus on things that have a chance. In a way this is qualifying an idea before you move forward. In my career, I have spoken to entrpreneurs who take months, sometimes years of development to have nothing happen in the end. In my organization, people use this process, therefore, all of the ideas that are spoken about have already been put through the ringer, it saves alot of time, and is a smart way to work.
You should be able to determine if your idea should move forward in about three minutes. Again, there are alot of great ideas out there. When you hear of one, in your mind, go through this process, when you get to the “Benefit to you or your business” part, don’t just think of making money. There should be two or three benfits to you ie, more customers, more leverage, leads to partnering opportunities, awareness in the marketplace etc. etc.
I’l give you an example
A great idea came across my desk recently. Distribute hair and beauty products to salons all over the world via the internet. I actually like the idea, makes sense right. I skipped right to the time and cost to develop part. My first question was “How many products will you be carrying” the answer was thousands. Ok, “will you be carrying inventory”, no we don’t need to, everything will be drop shipped from the manufacturer. I then asked “so a company like Paul Mitchell who sells directly via sales reps will change their business practice that has been extremely successful over the years for a start up company like yours”? His answer changed, he answered, yes we will be carrying inventory. I then re-confirmed that they would be selling around the world. I asked if they had an accounting system in place that would calculate sales tax for each individual state in the U.S. and if they had considered VAT, value added tax for selling outside the U.S., the answer was no we don’t. “Do you have contracts in place for the 1,000′s of salons you will be partnering with”, no. Do you have a cotract developed for the manufacturers, no we do not. And the list goes on.
So here is a great idea, they will be carrying thousands and thousands of dollars for inventory, have given no thought to an accounting system (for this type of distribution you would need a very advanced system, sorry quickbooks), there is no consideration of taxation or contracts, and the list went on and on.
How about the team, do you have anyone that has extensive experience in channel or distribution domestically and internationally, no, do you have an accounting firm reccomending or currently advising, no, did you incorporate, and if so in Deleware where you there are huge benefits especially for taxes and where your company can be situated, no, we’ve incorporated in Massachusetss. No comment on that one.
So here’s an example of a good idea, with lack of consideration to the time and costs to develop. Over a year later the company has still not launched, and are running into alot of roadblocks. I don’t claim to know the future, but let’s say I took a good guess that this wasn’t going to work with the current mindset and the current team.
What IBBTTM does for you
It forces you to think. It doesn’t solve all of the problems, but it forces you to think about your idea. Most people think of an idea and go forward with it, what tends to happen, when it is not well thought out, it usually fails. Going through this process will dilute your risk, save you time and increase your chance for success. And remember one thing. It’s alot cheaper to make mistakes on paper, that I do know.