Entrepreneurship

How do You Know you’ve got a Good Business Startup Idea?

Good Business Startup Idea
0

How do You Know you’ve got a Good Business Startup Idea?
It seems like the business world is heavily saturated with start-ups right now. The Small Business Agency estimates that around 543,000 new businesses get started each month – and every founder thinks they’re on to the next big thing.
So the big question is this: how do you know if your business or startup idea is any good? I’ve put together a quick guide to assessing your startup or business idea.

 

Identify Your Market

In the words of Mark Zuckerberg, “start with the problem you’re trying to solve in the world.” Figure out why your product is important, and to whom.

Not only will this help you see where your business would fit in in the real world, it will help you develop your idea into the most efficient solution possible.

In order to narrow down your potential customers, think about who your key target audience will be. Create a customer profile to help you better understand your average consumer, and then make your decisions with that persona in mind.

You can use this information also to help you decide which advertisers you should be approaching, what your image should look like and who your potential investors might be.

You also have to think about the type of market you want to enter into. While niche markets will likely mean less competition, they also mean less potential customers.

On the other hand, by targeting a broader market you lose some of the authority that you could gain by positioning yourself as an expert in one area.

It’s up to you to figure out which model will be best suited to your particular business – and your skills and expertise.

 

Check Out Your Competitors

After you’ve identified your market, it’s time to dive right in and see what else is out there. Find out who the industry leaders are and figure out what makes your product different to theirs.

By looking at what your competitors have to offer, you’ll be able to better identify your unique selling point, or USP.

This could be a more advanced product, it could be a lower price tag or it could simply be a unique company ethos.
It’s important to remember to look at not just the most widely known or the most profitable companies, but also the companies with a memorable brand and a loyal following.

When setting your expectations, you should also try and seek out companies of a similar size and standing to yours; there’s no point pitting your start-up drinks company against a corporation like Coca-Cola.

Scoping out the competition is also a great way to gain valuable insight second-hand. See what you can learn from them: what have they done right and what could you do differently – and more importantly, better?

Have a look at their social channels, their marketing campaigns, their websites and their storefronts. Public corporations will also have quarterly or annual reports available as public information, which can be useful when doing research.

 

Market Research

Once you’ve got your idea, found your USP and figured out who your audience are, it’s time to see what they think.

Getting feedback from the right people early on will be instrumental in developing and improving your business.

You can choose to outsource this research to a dedicated market research agency, or you can conduct it yourself.

Agencies will save you a lot of time and they can be an invaluable resource – particularly when you’re looking for large quantities of information – but market research doesn’t always have to be grand scale – especially in the early stages.
Get opinions from family and friends who you trust to be brutally honest with you, and preferably who fit into your target market.

Once you’ve got your feedback, your next challenge is to listen to it. When you’re passionate about an idea, it can be tempting to block your ears when someone points out problems with it, but your market research will be your best indicator of how your product or idea will be received by the public.
It doesn’t matter how much you like it if your consumers disagree. Take feedback on board and don’t be afraid to make big changes according to what you hear.

 

Crunch the Numbers

While you might start out with the idea, you want to end with a profit, which means that you need to ensure your business idea is going to make you money. Sit down and write out a detailed business plan. Work out your overheads and weigh them against your projected takings and then ask yourself the tough question – is it worth it?
If it looks like your business might cost you more than it’ll make you, there’s no need to give up straight away. Instead, think about what you can change. Which costs can you cut out?

What can you put off until later, when your business will hopefully be in a more comfortable position? Could you increase your prices to account for your costs?

You also shouldn’t be disheartened if you’re not seeing results straight away; very few businesses make a profit in their first year.

You do, however, need to think about the future and when you do expect to be turning over a profit – both for your own benefit and to present to potential investors.

Of course, markets (and a number of other variables) change, so you’ll have to continually re-evaluate your projections as you go.

 

Seek Advice, Mentors and Partnerships

When trying to figure out if your business idea is any good, some of the best feedback you can get is from other business people who are invested – or considering becoming invested – in it.

Many successful entrepreneurs maintain that having the right people surrounding you is the most important key to starting a business.

Approach people who you trust and respect to become involved in your company – either as business mentors or as partners. Pitch them your idea and take their advice on board, even if – or should I say especially if – it’s negative.

Listening to constructive criticism is essential to developing your business, particularly when it comes from people who really know what they’re talking about.

You can also gauge the popularity of your idea by the response you get from potential investors.

If you have a lot of interest from serious investors, you can be confident that you’re onto a good thing. If you’re struggling to find investors willing to come on board, don’t be afraid to ask why.

You might be surprised by their answer, and their feedback could help you improve on your original idea.

 

Test the Waters

You’ve got your idea; you’ve found your market; you’ve got your business plan; you’ve got your team – now’s the time to put it all into action. Ultimately, there’s no substitute for real world experience.

Start with a small launch or a trial run in order to gain real customer feedback. For example, soft openings are a great way for restaurants and other hospitality businesses to introduce their brand to new customers while still leaving room to make last-minute changes or improvements.

It’s also an opportunity for new staff to practice their roles and get familiar with processes and procedures.

Similarly, app companies or other businesses in the tech sector might have a trial evening, where a select group of customers are invited to try out a new game or product.

As well as giving developers a chance to gain valuable feedback and make any edits before the product goes live, these events can be a great way to generate publicity and get your audience talking.

 

Trial & Error

Of course, even once you’ve entered the market, there’s still plenty of work to be done in order to maintain your business’ quality.

And the old adage “don’t fix what isn’t broken” doesn’t apply here; sustainable businesses are ones that continually come up with new ideas and improve on old ones.

With technology constantly changing and new start-ups always entering the market, it’s important to stay agile and to be able to keep up with the times.

Don’t be afraid to test out new ideas, because even if they aren’t successful, you can learn from them and use that information to come up with your next idea.

And if an idea is successful, don’t be afraid to develop it further. Remember, just because your original idea is good, it doesn’t mean that it couldn’t be better.

 

So, what do you think? Do you believe in the light-bulb moment, or do good ideas take a lot of pruning? Share your thoughts in the comments.

Aniket Warty
Adventure Capitalist. The creation of wealth is merely an extension of my innate freedom to produce.
You may also like
reputation management
Corporate Reputation Management
startup ceo secrets revealed
A Startup CEO Secrets Revealed
11 Comments
  • Jaime Oct 17,2016 at 8:41 am

    Trial & error is the best way that I learn. I do try to minimize my guesswork by doing some initial research, but for the most part I like to just dive in as fast as possible and discover what works best for me.

  • Helen Smith Oct 17,2016 at 3:25 am

    I definitely believe in those light bulb moments. Great ideas are like clouds. They are always passing by and you just have to be aware of them and reach out and grab them! It may be ready to go or a diamond in the ruff. That’s where cultivation come in.

  • Carlton Oct 17,2016 at 3:14 am

    “It doesn’t matter how much you like it if your consumers disagree.” This couldn’t have been better stated. Many business owners become stubborn in their own ideas, because they become too attached to them or don’t want to have to go through the trouble of changing or tweaking things once they get comfortable. But business owners who are not willing to put in the ongoing work to improve their product or service are shooting themselves in the foot. It takes constant and never-ending improvement in order to thrive in the marketplace nowadays.

  • Kadoya Tsukasa Oct 15,2016 at 7:59 am

    A light bulb idea huh? it is similar to hope for a lightning in a bottle. Having an idea is one thing but to increase its success you may need to be in the drawing boards over and over again. Luck may also take part in it. Call me old school but at times its beter to be lucky than smart, lucky than being good.

  • Kyo Kusagi Oct 15,2016 at 7:53 am

    To answer that question is a toss up. Why because you may never know what will happen I mean yeah some goes with the plan but things does not always work out. To be blunt, Not all ideas that are good in paper will translate into the big leagues.

  • Mau Oct 14,2016 at 9:55 pm

    I do believe in light-bulb ideas. But the “how” of carrying out the ideas is probably the one which needs pruning. It takes skills and the right mindset to act upon a light-bulb idea.

  • Isabel Oct 14,2016 at 4:37 pm

    I am passing this on to my daughter who want to go into business. There are plenty of insights here that will be useful for her. Thanks!

  • Margherita Oct 14,2016 at 6:51 am

    This article should be read by people who had a lightbulb moment about their product/invention but get disappointed as they go through the process of pushing that product to the market. Competition is tough but with the right guidance, startups can still maintain that positive attitude.

  • Mansoor Oct 14,2016 at 6:44 am

    I sometimes have this idea about a product. But before I put much effort into that product I immediately check out the competition. And from the information I gather from the competition, I can create my USP (improve my product). It’s kinda hard to create an original product nowadays, what with almost all our needs already have a solution. But I can also create a problem (just like poor battery life in smartphones) so I can offer a new product (portable batteries/power banks).

  • Maury Cheskes Oct 14,2016 at 6:38 am

    Very insightful. Like you said, I think a good business entrepreneur should not just be looking to make a profit, but to help for a noteworthy cause. People get so scared that with all the technology that’s in the air, the world is going in the wrong direction, but I humbly disagree and think now we are coming to the age of putting our visions together with more assets at our finger tips.

  • Russ Oct 14,2016 at 5:10 am

    I really like the part about checking your competitors out. This is very important to have competitive intelligence with so many businesses launching nowadays. If you don’t keep an eye on them they will surely pass you up fast!

Leave Your Comment

Your Comment*

Your Name*
Your Webpage