12 Ways to Know If You Have a Great Business Idea11:10 AM
Ready to take on the world of entrepreneurship? In order to find startup success , you need a grea...
Ready to take on the
world of entrepreneurship? In order to find startup success, you need a
great business idea. It may come as a flash of
inspiration or something you've been dreaming about for years, but
you've got an idea for a business and are intent on getting it off the
ground. But a winning business idea is more than just
something you're excited about or good at — you have to make sure your
idea is actually viable. At the beginning, the number of steps involved can seem daunting. But if you break those steps down, you'll be well on your way to a successful launch.
Being unique is important, but don’t be different for the sake of being different. What separates you from your competition must be something that is noticeably beneficial to your audience. Being different just to be different will make you look like an amateur.
Lock Down the Details of Your Business IdeaCreative ideas rarely come in an orderly fashion. When we are visited by our muse, the details can often flood our brain in the most unstructured way. That’s why, in order to shed full light on a brand-new business idea, you’ll have to organize your thoughts, and the best way to do this is by writing them down.
If you’re thinking I’m about to advise you to write a 40-page business plan, don’t worry. Formal business plans are for investors, partners, and other external parties — who often never read the full document.
What you need is a simple and concise summary of your business concept, a one-page document that you can refer back to anytime you need to touch base with your original thoughts (be it to stay on track or to alter your path … but we’ll get to this later!).
Squeeze more out of an already successful idea.Sometimes when something works, it’s a good idea to milk more out of the idea. Troutwine has taken his entrepreneurial mind to Hollywood and produced several films. He brought together six filmmakers for the film Freakonomics, which is based on the book of the same name written by Steven Levitt and Stephen Dubner. Troutwine is expanding the Freakonomics concept into a brand and media channel a la Martha Stewart, Jim Cramer, and Arianna Huffington.
“I’m taking something that already existed and squeezing more out of the lemon,” says Troutwine. “We’re taking one thing done extremely well and building a brand to successfully extend it into several more things.”
Can you explain your idea in the simplest terms?
Your business may solve a complicated problem, but you should be able to explain it in simple terms so that anyone can understand it, said Kris Duggan, CEO of goal management company BetterWorks. Duggan suggested using what he calls "the grandma test."
"When you typically hear someone pitch their idea, it's usually chock-full of important-sounding jargon that rarely makes sense," Duggan said. "When you think about your new business idea, ask yourself, 'Can it pass the grandma test?' In other words, would your grandma understand what you do? Perhaps your business is solving a complicated problem, but early on, come up with a way to explain it that makes sense to the masses."
Are you passionate enough about it?
Your business will likely take up all of your time, so make sure you're passionate enough about it to make it successful.
"Since starting a business requires an inordinate amount of time, energy and patience, ideally, the idea will be one that you are passionate about, as well as one that you have skills or experience [in]," said Melissa Bradley, executive-in-residence and director of entrepreneurship and innovation at the Kogod School of Business at American University.
Have you tested your idea?
You won't know if your business is viable until you test it on strangers.
"Test it — not just with friends who will be too polite to tell the truth, but with honest people who would make up your ideal target audience, and then listen to the feedback," said Lisa McCartney, chief "PLYTer" at educational math board game company PLYT. "
"If your target sample is saying [your idea] is fantastic and [asking] where can they get it, you know that you're onto something, but if they are less than enthusiastic, it's probably not as good an idea as you thought."
Associate with a marketing professionalIt’s better to take the advice of a marketing professional right from beginning. Doing this will reduce your business risk as well as overhead expenses, while providing you with details about how much your business demands in terms of promotion and advertising. New businesses that ignore the value of marketing and think this is something that can be worked out later are usually seen rectifying errors committed at the outset. For example, opting for an online business requires a website that can meet usability standards aptly and offer the best customer experience. A digital marketing specialist will tell you in advance that your website needs to be SEO friendly, and the right ways to build it. Developing a platform accordingly will minimize half of the difficulties that can surface later and prove troublesome.
Step into the right zoneSave yourself from investing in wrong area. To avoid goof up, pick a business idea based on your personal strengths and areas of interest. Developing a business that depends on skills will save you from problems that invariably surface when someone ventures a completely unknown business model. You can also brainstorm, take surveys, or talk to friends for help in this regard. Also ask yourself, how long you will be able to survive without making a profit? What’s your goal/vision as an entrepreneur?
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Crowdsource your market researchTwo successful entrepreneurs in two different countries let us know that putting up public ads on free sites to form focus groups was easy and effective. Everyone has to do some kind of market research to test their business idea, and this method is accessible and inexpensive.
The CEO of Toronto Vaporizer, Nima Noori, set up test ads of Kijiji (Canada’s equivalent to Craigslist). He advertised that he would do local drop offs around his general area for those who wanted a quality product quickly.
“I figured that this would be an easy and cost-effective way to assess the demand for these products in my local area. The same day these test-ads went up I got multiple inquiries and at this point I hadn’t even purchased inventory! This was the green light,” he says.
Peter Friis, CEO of ESSIO, makers of a spa-inspired shower head diffuser of essential oils, used a similar tactic to test his idea. He placed an advertisement for a focus group on Craigslist and offered to pay people in either cash or product for their participation, with the caveat that they had to fill out a user survey.
“The response and results were incredible and truly helped us validate our business idea. More than 100 people signed up and of those that completed the test more than half wanted to be paid with product refills. That was when we knew we should get to work,” he relayed.
Personal ExcitementThe last crucial ingredient for your business idea is completely subjective, because each one of you reading this has a different set of likes and dislikes.
It’s important that your business idea gets your heart pumping.
But, understand this – I’m not telling you only to pursue something if you’re passionate about it, at least not in the way that most people take that advice.
For example, Steve Jobs – the man who most recently pushed this idea of “follow your passion” – was not born an innovative tech-geek. He was known for walking around barefoot in college, and as a young man he spent several months on a psychedelic-filled spiritual journey through India. Not exactly the basement-bound nerd most of us might imagine.
What I’m saying here is this:
While Steve Jobs wasn’t born to be the king of Silicon Valley, he WAS born to be a mover and shaker. He was born an entrepreneur, and he was passionate about any idea he believed could change the world.
In a similar way, your business idea should excite you. It should be something that you can see throwing yourself into 100% and then some. If you’re not passionate about your idea, if you don’t see how you can change something, then you should probably go back to the drawing board.
On the other hand, if your business idea includes all five of these ingredients, then it’s time to throw ’em in the pot and see what you can cook up. Chances are you’ll create something that a lot of people genuinely love, and that’s what this whole entrepreneur thing is really all about.
You’ve kept it simple and responded to feedback.“A lot of people say, ‘I could really build a better Expedia if I could just bring together air, car, hotel, destination, activities, customer reviews …’ Every one of those things is a big problem, and you can’t do everything well, so you end up doing nothing well,” Brockway explains. “I think that’s a big red flag if you just keep adding on features and functionality to your core product to try and make it more attractive to people.”
Unique Selling PointIf you know anything at all about marketing or copywriting, then you’ve already heard of this ingredient.
A unique selling point, or USP, is something that makes you different from every other competitor in the market. Your USP is what your audience can’t or won’t get from anyone but you and your business.
Honestly, you could probably find several. For instance, both Kyle and I are successful Internet entrepreneurs. Our goal is to equip you with battlefield-tested tactics and ideas instead of abstract theory or regurgitated marketing-speak.
But there are other legitimately successful entrepreneurs with blogs… What makes us different?
Find people who hate your idea.Balance is paramount. Of course your friends and family will love your idea. Putting your idea in front of people who want to poke holes in the concept you believe in will help you make it stronger.
“You don’t want to be blind to potential pitfalls so you want to talk to a lot of knowledgeable people in related industries whether they like your idea or not,” says Rasmussen who is a big fan of using the online poll. Rasmussen suggests Mechanical Turk, where you set up a task to fill out the survey and then poll people as to whether they'd use your idea or not.
As the CEO of a startup, you can’t control whether you come up with an idea before its time. But you can look at trends and shifts that may signal the time is right to take your idea beyond the light-bulb stage.