Rookie Business 101 | Part 1: The Million Dollar Idea

Rookie Business 101 is a series sharing the steps to building a business. 

 

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Every business starts with an idea. Ideas are often as a result of observation and thought. For Armancio Ortega, the founder of Inditex (Zara) and the second richest man in the world, it was fully conceived while working as an assistant in a shop; La Maja. Working in a garment shop, he noticed the delays caused by middlemen in the supply chain and the additional costs incurred by them which were then passed on to customers in form of increased prices.

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Today, we see that idea materialize into shops from Champs Elysee in France to Fifth Avenue in New York. Today, Zara handles everything from manufacturing to distribution but it all started with a little idea to make fashion as affordable and as democratic as can be. Of course, that idea has grown and a lot of other strategies have been added to make Zara the success story it is today but it remains an integral part of their business model.

 

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Warby Parker is a 1.2 billion dollar company that started in 2008 when one of four Mba students wondered why glasses weren’t sold online but you see that thought which later metamorphosised into the bilion dollar idea was by Neil Blumenthal, who had run a nonprofit called VisionSpring that trains women in the developing world to give eye exams and sell glasses.

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So its not particularly strange but genius that for every glasses that is sold one goes to someone in need. This is genius as the millenial generation that shop Warby parker are socially conscious so they’re quick to spend their dollars on a brand that’s commited to doing good.

 

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The founders of Brooklinen, a 25 million dollar company founded just under 3 years ago was as a result of an inspiration gotten in a hotel room Vicki and Rich Fulop where they encountered luxury sheets they were absolutely in love with. On getting home, they tried to purchase theirs but were discouraged by the price tag of 800 dollars.

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Today they sell luxury sheets that cost less than half that price. You see, they did their research and found that the high price tags were as a result of licensing and retail margins so they decided to go straight to the customer as the online market for bedding was untapped.

What is your million dollar idea? How do you bring it into gestation?

As seen by these case studies I have shared, it usually starts with you noticing something. It doesn’t have to be new, It could be something people are doing but haven’t quite done it well. That thing they haven’t done well that you have noticed may as well be your secret sauce aka Unique Selling Point. Every great business starts off with an idea. It doesn’t end with an idea though. The idea is just the kick off point.

Mistakes People make in the idea stage

  • Start making the product and selling straight away.
  • Register a business name and buy domain based off of idea alone.
  • Assume they already have a business at this stage.
  • Start making branded items like business cards, packaging, stationery etc

P.s: Note that these billion/million dollar businesses have something in common; an online store. Infact 2 of them started off as online stores. Zara with all their iconic brick and mortar stores have seen tremendous increase in revenues from their online stores. You are missing out on a big piece of the pie if you don’t have an online store. You can learn how and actually start one in one of our classes. Book a spot either in our Lagos or Abuja Class.

 

For further reading:

On Zara’s Supply Chain;

https://www.tradegecko.com/blog/zara-supply-chain-its-secret-to-retail-success

https://www.bloomberg.com/news/articles/2013-11-14/2014-outlook-zaras-fashion-supply-chain-edge

 

On Developing your business Idea:

http://smallbusiness.chron.com/call-business-venture-idea-stage-23047.html

 

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