Got a Good Business Idea? Here's How You'll Know
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There is no shortage of business ideas, but so few get off the ground. What separates the long-lasting endeavors from those that have a quick expiration date? BusinessNewsDaily spoke to some experts to get a read on the factors that are common in business ideas that take off.
1. It is innovative or offers a twist on an existing product or service. Opening the next pizza joint in a strip mall that already has two pizza parlors is not a formula for success, unless you plan to offer something the others have missed.
"Being new or first is not enough," said Jose Palomino, founder and CEO of Value Prop Interactive, a consulting firm, and an adjunct professor of marketing at Villanova University. "The iPod wasn't the first MP3 player, but it defined the category. Being innovative or new doesn't work if your product doesn't matter to anyone."
It doesn't always pay to be first to market with a product, experts say. "It is not necessarily the person who gets their idea to market first that wins," said Karen Russo, president of IIPE, an international candidate and name generation firm, and K. Russo Consulting, an executive search and human resources consulting firm. Think BlackBerry being eclipsed by other smartphones that followed. "Sometimes, it is better to sit back and learn from others before jumping in," she said.
2. It is indispensable, even if people don't know that they need it. "Sure, the pet rock was hot, but once people got over the novelty of a rock in a box, there was no need for it," Palomino said.
3. It is exciting in its execution. "The Jaguar is a good example of this," Palomino said. "It is more than just a car."
4. It solves a problem. The problem should be significant and something that impacts a large group of people. "If there aren't a lot of people who have the problem or if it is not a problem that people really care about solving, move on," said Gordon Adomdza, assistant professor, Entrepreneurship and Innovation Group, at Northeastern University. He points to Facebook, which tackled asynchronous connectivity, and Google, which addressed the problem of search. "Since the problems are big, there is room for the company to revise its offering, innovate its business model and still be in business even when customer needs change," Adomdza said. "Because the problem is big, the company can still survive by pivoting within the space."
Products that relieve someone's pain point in a quick and obvious way have a good shot at success. "Your product has to make things easier for them or find a way for them to save money," Michelle Coussens, the dean of the School of Business at Kendall College and an entrepreneur who started her own consulting business, Plan B Consulting.
5. It has the potential for expansion. Is your idea something that can grow either geographically or through product extensions? "The best business ideas start out small but it is clear that they have the ability to grow and expand," said Terry Mackin, managing director for Generational Equity, a company that assists business owners in stock and asset sales, mergers and divestitures.
"You have to be able to build organically," Russo said. "You have to have a financial model that allows your idea to grow."