How Do I Know I Have a Good Business Idea?
Ready to take the leap into entrepreneurship?
Well, not so fast!
E-commerce is an exciting enterprise and growing bigger by the day. Shopping online is becoming the new normal and of course you’d want a piece of the pie. That’s a smart business move–if you can make it work.
The Internet has made it easier and easier to start a business. All you have to do is put ‘how to start a business’ in the search box. But it’s also easier to fail. Because no matter what resources you put into it, all successful business start with a viable idea.
So to save you valuable time (and money) here are seven questions you should be able to answer in order to know that you have a valid business idea.
DOES IT SOLVE A PROBLEM?
Businesses solve real problems. Helping people is still the best way to make a living. And it usually starts with questions like “why can’t I…?” or “wouldn’t it be easier if…?” Feel free to fill in the blanks.
The best businesses have their roots in problem solving whether they wanted to make something faster, easier, or more enjoyable. If you, a family member, friend or colleague has a frustration or complaint, chances are more people you don’t know share the same sentiment: having the same lackluster experience or feeling impeded in some very real way.
That’s a real problem…but is it worth solving? And by “worth” I mean “will you spend your time, energy, and money to build something around it?“
Food for thought indeed.
WILL SOMEONE BUY THEIR WAY OUT OF THAT PROBLEM?
An idea is just an idea until someone pays for access to it. Customers validate businesses because businesses make money. Without customers, you’ll likely have an expensive and stressful hobby on your hands.
It doesn’t matter how big or seemingly small the problem is–that’s all subjective. I’m sure there are some products you see on the market and stare in disbelief at their success. But that doesn’t stop them from being successful.
If someone will make a purchase, that idea is one step closer to becoming viable. You just need to ensure that you can have sustainable revenue. And that comes from actually having the right volume of customers.
HOW LARGE IS THE MARKET?
You’ve heard of companies doing well with a “niche” market. That just means their ideal customer segment is relatively small compared to the potential purchasing power in that entire category. What it doesn’t mean is that they’re just selling to five people.
Without a large enough market, your business idea may never get off the ground. So even if it’s a niche market, it’d better be a strong one, one that can actually support your business.
If not, you’ll run out of gas before your idea gets steam.
And speaking of fuel…
ARE YOU PASSIONATE ENOUGH ABOUT THE IDEA?
At some point, we’ve all seen something that we’ve been excited by, that ‘next big thing’ or ‘must-have’. But excitement is not passion.
Your business will likely take up all of your time, energy, and at least a good portion of your cash to make it a successful venture.
Your dedication will probably be tested on more than one occasion. Only you can determine if you have the staying power to see it through all the (potential) ups and downs.
If there are any questions to that, then this might not be the right idea (or the right time).
HOW DOES IT PERFORM IN REAL LIFE?
So it works in theory. You’ve batted it around to people you know and they’ve made at least some form of affirmation.
But you won’t know for sure until you test it with strangers, those who still fit all of the criteria for your target market or consumer avatar but are way less likely to sugar coat their opinions.
You want to find real enthusiasm among the segment, people who’d say “sign me up” or “when will I be able to buy it?”
If that’s not the response, you may want to rethink the launch.
DOES IT HAVE TO HAPPEN EXACTLY AS YOU’VE PLANNED?
The customer is always right, when they’re your customer.
Part of running a successful business is the ability to be flexible especially when it comes to customer feedback.
If you’ll only offer it in the colors/sizes/bundles you want to, then you’re missing one key part of the ingredients list.
Look, there’s value to having and sticking to a vision. But being unwilling to tweak an idea as things develop will severely impede your potential.
There’s nothing worse than the ceilings we place over ourselves, those are usually the hardest to break through.
A closed mind rarely yields an open door, especially in the realm of business.
WHAT’S THE MARKETING PLAN?
Between the concept and the sale, there’s marketing- all of the activities you engage in to position and promote your product in front of your target consumer.
You can have the best product in the world but if no one knows about it then you can’t hope to be successful.
Visibility is a big deal, especially in e-commerce. If you don’t have an effective marketing strategy, then it’s not worth getting started.
Being able to think that through, as early as possible, helps you allocate the right resources (blogging, email marketing, web development, SEO, influencer partnerships, etc.) to make your business a winner.