Business creation is the transformation of a creative project into a profitable and sustainable economic activity. This process involves a series of tasks such as carrying out market research, drawing up financial forecasts or choosing a legal form. These tasks can be very time-consuming.
The first step is to find a business idea. This can be done by researching consumer trends, finding out what the existing brand leaders are offering or even asking your potential customers what they want. Once you have a good idea, you can start to create your own business plan.
The next step is to implement the business innovation. This is the phase where you test and launch your ideas in the marketplace to see whether they work. Then you can make adjustments to improve your products and services, or to lower your costs and increase profit margins. The Dyson vacuum cleaners, for example, were a business innovation that used industrial cyclone technology to revolutionize household cleaning. Ride-sharing companies like Uber and Lyft are another business innovation. And Gillette’s Mach3 razors are a further example of product innovation that led to better efficiency and performance.
Many businesses remain in the Survival Stage for some time, earning marginal returns on their investments of time and capital (see endpoint 1 on Exhibit 4). Others can’t overcome the barriers to achieving full economic viability. In some cases, they simply run out of cash and close down.