Readers Question:

Hi John, I would like to know, what you think, is the best way to approach a business with a new idea or concept. I find that I have a knack for coming up with really new, and profitable business ideas. (I would like to point out that I’m not solely relying on friends or family to say the ideas are good.) Some have come to fruition and others haven’t. I seem to find that when focused, I come up with 2-3 very new concepts. I find this frustrating, as I would like to see some of these ideas come to life. Whilst I might not know how to make it, or design it, I can see how it would work.

Basically, how do I approach a company with a new idea. bearing in mind, I’m just a 23 year old.

Well first off age doesn’t matter, sure in some cases you’ll be making life harder for yourself if you look young and inexperienced. If however, you’ve got a genuinely good idea and can get the basics across succinctly, with enough research (or better yet trade history) to prove the idea is feasible you should be fine.

I would approach the businesses with a written business plan. In the business plan you need to clearly explain the idea, the benefits it has to offer, costs involved in implementing it and how it would provide a return on investment taking into account the market and competition. The act of writing the plan will no doubt further refine the idea. If you need more information about writing a business plan, then the Business Twins have a series on Writing a Business Plan Step By Step.

Alongside your business plan I would begin looking for companies that might be interested in your business idea, either because it targets their customers or it fits in with their area of expertise. Build yourself a list of target companies and start collecting information about them for example:

• Who are the directors, heads of departments or investors – you want to be able to send your enquiry to a named contact, ideally the person that will be most interested in what you have to offer and is either the key decision maker or an influencer of the key decision maker – don’t discount PA’s or secretaries here often they wield a lot of influence.
• What recent aquisitions have they made – if they’ve just aquired a competitor (or been aquired by one) then they are unlikely to be interested.
• What state is their business in – if they are struggling financially they may not be in a position to invest.
• What strategic alliances do they have – again if the have a partnership with a competitor they may not be in a position to work with you.
• What are their strengths and weaknesses in their market – focus your letter of introduction (or better yet tailor a copy of the business plan) to emphasise how your idea will help.

Once you have a business plan and a target list of companies I would start mailing them an introductory letter including at least the executive summary possibly even the full business plan (this will depend on your concerns about Intellectual Property Rights (IPR) and the level of protection you have). if you only send out a maximum of 10 per day it’ll make it easier to follow each letter up with a phone call two to three days later to check they recieved it and ask for an appointment to talk them through it and answer any questions.

Unfortunately it won’t always be as easy as that. To get their attention you may need a personal introduction, in which case widen your circle and start to find out who might know them and be able and willing to make an introduction, then pitch your idea to them explaining what you would like them to do for you. Good places to consider are their lawyers and accountants (you can often get this information from their public accounts), external consultants they use, well known friends of theirs or other professional contacts you know they have – look through their press releases and search the web for past press coverage to help you find this information.

Sometimes you’ll need to try both routes several times and you can expect to get a lot of no’s along the way, for each one try to find out why and see what you can do to address the issue either to come back to them or for future pitches.

Asking John:
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