Flying from Chicago to Houston, a conversation sparked with my airplane neighbor, John, about business and entrepreneurship. Working as a Chemist in a coating company (coating for boats, bridges, etc. to prevent erosion/decay) for almost a decade, he has aspirations to start something to call his own one day.
Following an exchange of business cards, John took an interest in Hopping 4 A Cure as it was a nonprofit and asked more about the process of becoming a 501c3. In short, I explained that it was a long process that takes a lot of time and money to get all the documents prepared correctly. Even once the papers are prepared, the application process for the tax status might take six months at a minimum (Hopping 4 A Cure took almost 2 years)!
The concept he is working on takes adults from various professions (lawyers, judges, doctors, chemists, ect.) and pairs them up with youth for mentorship/life coaching. John is still in the ‘idea’ stage but seemed to want to jump right into the process of becoming a nonprofit.
Why?
Through a number of conversations with people I have had, many people who have ‘ideas’ and concepts they want to pursue are quick to become a legal entity – from 501c3’s to LLC’s. I say wait. Why put forth the time and money for a company that might not be viable or worth pursuing a year from now?
My Advice (take it or leave it): Take your product/concept/idea and put it to the test as soon as possible. Fail. Create an MVP (Minimum Viable Product) and get feedback fast. This may be generic information from many ‘Entrepreneurship 101’ classes, and part of the daily conversations had in places like the UF Center for Entrepreneurship and Innovation however to those who haven’t taken entrepreneurship classes or do not have access to these resources, here’s why:
- People may not be interested (sorry)
- You may not be interested
- In John’s case, if he starts hosting an event or two but finds that organizing these activities is not something he is willing/wanting to do for a while, then he might be better off leaving this or handing it off to someone else
- Others will give you feedback that could help you define your target market
- In the Innovation Academy’s Venture Accelerator course, we had to ask over 100 people about our product/service throughout a semester (roughly 10 people each week) based on different areas of the ‘Business Model Canvas’ specifically to nail down exactly who would spend money on what we were working on and what we could add to incentivize potential customers to buy more, or spend more
- You may find there is a better/more efficient way to improve processes
- Although our Hopping 4 A Cure events have remained relatively similar since our first event in 2011, we added a team element and improved how we keep track of time for each participant through player cards, given to each Hopscotcher – both of which was a result of an event recap between the volunteers and organizers of our initial event
Long story short (something that typically means I have a lot more to say..), take time in validating your idea/concept/product before taking the time and money into making a full scale business entity. Hopping 4 A Cure was endorsed by the National Multiple Sclerosis Society before we decided to become our own Full 501c3 nonprofit and we only started filling out paperwork around our second event, a year after we hosted our first one.
Good luck John, hope it all works out for you! (Funny because I am writing this right next to you writing this!)