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DEVELOPING NEW BUSINESS IDEAS178

the bigger picture We saw in Chapter 3 the importance of

striking the correct balance between under- and over-analysing
opportunities, avoiding ‘paralysis by analysis’ at the same time as
ensuring that ideas could withstand at least a basic challenge through
the financial numbers.

At this stage in the process, and ahead of the more detailed business
plan, it is quite appropriate to adopt a broad-brush approach to the
analysis, making simplifying assumptions where you can and avoiding
spurious detail. The important element is to sort the wheat from the
chaff as effectively and as quickly as you can, so that you maximise the
time spent on the most promising ideas.

you don’t need accuracy to two decimal points Sometimes, you
may have no option but to work with rough-cut numbers. If you are
working on your own, you will not enjoy the luxury of accessing the
analysis of corporate research departments. You will be dependent on
your own time and money and therefore more reliant on information
which is already in the public domain.

sometimes, you may have no option but to
work with rough-cut numbers

In addition, it may be that your product or service is addressing a
market for which no data exists, either because it is too small to gather
the attention of the market reporters because it is still in its infancy or
because your business idea innovatively straddles a number of different
sectors for which no aggregated data yet exist. Karan Bilimoria adopted
the bigger picture approach with his Cobra beer, for example, unable to
rely on any detailed market research concerning ethnic beers.

Simplifying assumptions may also be in your best interest. If a
particular market is detailed to the nth degree, it is likely that others
may perceive the same opportunity as you. Equally, a smaller operation
can react faster to information which is incomplete, precisely because
it is not constrained by a corporate hierarchical system of decision
making based on extensive data.

like staff recruitment, only different The increasing level of detail
applied to the evaluation and selection of business ideas is similar in
nature to the process of recruiting senior staff into companies. The
coarse-screening of applicants against key hurdle criteria creates a long
list. This long list is then compared in more detail against the criteria