All it takes is hard work and passion.
Well, that’s what the inspirational quotes would have you believe. The truth is all the hard work, passion and energy in the world isn’t going to get a lame duck to fly. If you have a new business idea and you think it’s the next big thing, then it’s worth doing some serious assessment before you spend a whole load of money, time and resources.
If your business doesn’t shine brightly above the rest, then the chances are you’ll end up in the murky depths of price competition and poor margins. You’re better to move on to something else.
Ask yourself these 10 key questions to decide if your business is a winner, or a time waster.
Are you filling a need?
A business that fulfils a new need will more than likely be a success. Carry out thorough research and get to know your market well. This is not the time to make assumptions. Get out there and canvas, survey, research and conduct focus groups. This is activity that Coca-Cola obviously didn’t do when it brought a new recipe to market. In 1995, the soft drink giant famously introduced ‘new Coke’, a sweeter version of the original. The newly launched product met with such vitriol from customers that the company was forced to pull the product from the shelves and return the original Coke. Take some time to research the needs your idea is addressing.
Is it worth paying for?
It doesn’t matter whether it’s a high price or a low price, your product or service has to have a perceived value to customers. Will your audience see the value in paying for this (and make an effort to obtain it)? People may tell you they like your product, but are they willing to pay for it as well?
Will your business motivate people?
Ideally, your idea will target an audience that is willing to take action, and respond to what you are providing. Starbucks didn’t invent coffee, but by providing an improved way of delivering coffee, they motivated a huge audience to engage in coffee drinking.
Will you be followed?
More than likely if you have a good business idea, it won’t be long before there are copycats. Imitation is the highest form of flattery. Just make sure you have a plan for how you will combat this. Have a strong business model that will make it hard for copycats to enter the market.
Are you sustainable?
And not in a green way. Is this a business idea that’s going to last? And if it’s going to last, do you have the resources to sustain it? The two major reasons startups go under is lack of capital or poor management. Think long-term and big picture. Are there franchise opportunities or a potential international market? Whether it’s a factory, computers, or an office space, figure out what you’ll need to make this happen And then figure out if you can afford the assets. It’s worth calculating these costs before you spend time and money on testing and product development.
Do you have a unique selling point?
Sure you do, you wouldn’t be here if you didn’t. But is that unique selling point noticeable? Is it easy for people to pick up on and create desire? A father and son team from Australia recently raised over USD$12 million on crowd-funding site IndieGoGo for the launch of their beehive invention called Flow Hive. The team created a unique and easy-to-use beehive that enables anyone to keep a beehive at home. No special skills or equipment is needed and their idea was so simple and easy to understand that they convinced thousands of people to start bee keeping. They had originally hoped to raise $70,000.
Can you demonstrate your idea to others easily?
Your ability to show other people the value of your idea is critical. Whether you need a prototype, sales forecasting data or an impressive PowerPoint show, you need to present your proposition well. Many business start-ups fail because the founder isn’t able to successfully explain the benefits of the idea to investors or end-users, not because the idea is a bad one.
Seriously, Google it. If you don’t find anyone else out there doing what you’re doing, then great. But if you do find other companies with a similar idea then you have found your competitors. Learn what they are doing. Most importantly, use Google keywords and Google suggestions to discover if your idea already has high demand.
Are you in a field you’re comfortable with?
Donald Trump’s father was a real estate agent, so Trump Jnr was immersed in real estate and property his whole life. It was easy for him to excel in an area where he had personal experience. If you are intrinsically comfortable with your business idea, then this won’t seem like hard work at all.
It’s worth asking some hard questions before investing large amounts of time and resources. If your idea doesn’t do well after you’ve done a thorough assessment don’t be afraid to walk away. There will be another idea. In the end, there’s no perfect formula for determining success. The best indicators of success revolve around having a unique product that helps people in some way, and appeals to a proven market who are willing to pay. Oh, and a lot of hard work and passion.