Starting a business takes an enormous amount of time and energy, so it’s essential to be passionate about your business idea. However, passion isn’t enough; you also need to understand if your business idea is viable so your personal investment is worth the sacrifice.
To help budding entrepreneurs, we’ll explain what a great business idea means, how to determine if you have one, and how to spark new business plans.
A great business idea can be monetized and produce unlimited earnings. It poses a solution to a problem many people face. A great business idea is clearly defined to the point where you can explain it to someone effortlessly. Your great business idea is the foundation on which you can build a successful business.
Sometimes inspiration isn’t the problem; the challenge is determining whether you have a good idea. Critiquing your idea and requesting feedback from as many people as possible is crucial.
To help you evaluate your business idea, we consulted several experts to create nine essential questions to ask yourself to determine whether your business idea has a chance for future success.
According to Mike McGee, an entrepreneur and the co-founder of web design school The Starter League – which has been acquired by Fullstack Academy – feels that the best business ideas solve a problem in some way.
“If there is a problem that affects you, your friends, family and co-workers, then the chances are high that it affects people you don’t know as well,” McGee said.
Whether you’re focused on a creative new business idea or have an idea for an easy-to-start business, you’ll need customers. Paying customers validate an idea and determine which ones have the greatest chance for success, said Wil Schroter, co-founder and CEO of Fundable.
“An idea is just an idea until you have a paying customer attached to it,” Schroter added. “Anyone can discredit a simple idea, but no one can discredit paying customers.”
Charlie Harary, co-founder and partner of investment firm H3 & Co., said great business ideas solve problems in a way that is less expensive than what the market will endure.
“Once you have determined that you are solving a legitimate problem in a scalable way, you need to determine not only the value that it delivers to the world but what people would pay for that value,” he said. “Once you determine the price, then you can assess if your solution is business worthy or not.”
Pricing your offerings can be tricky. Low prices can scare away customers, while overpricing can limit sales. You need to set a price point that works for everyone while managing customers’ perception.
Without a large enough market, your idea may never get off the ground. You must determine if a niche market exists for your idea. You’re better poised for success if your company improves upon what’s already out there – a novel response to a recognized need.
How can you tell if a business niche is, in fact, a market? It’s a mix of “research, gut instinct and personal preference,” according to Ari S. Goldberg, founder and chairman of investment firm RNMKR. “I consider overall industry trends, the amount of investment activity that’s taken place in the space recently, how much I’ve read about it from the consumer side and whether I’ve heard people talking about it,” Goldberg explained.
Your business will likely consume all your time, so ensure you’re passionate about it to make it successful. Your idea must be something you genuinely care about, not just something you’ve targeted because it seems like it could be lucrative.
“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, managing director of Project 500 and professor at the McDonough School of Business at Georgetown University.
“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, co-founder and head of tutoring and learning at PLYTIME.
“If your target sample is saying [your idea] is fantastic and [asking] where can they get it, you know that you’re onto something,” she added. “But if they are less than enthusiastic, it’s probably not as good an idea as you thought.”
If you’re not open to changing or adapting your idea to fit what your customers want, your business idea might not be worth pursuing.
“Success happens when you are willing to listen and consider others’ advice,” said Angie Yasulitis, CEO and managing partner at The YaZo Group. “Most good ideas take some tweaking to get to market. Being closed-minded is a business killer.”
Many entrepreneurs think about the problems their business will solve but not how they intend to market their company to their target customers. Jesse Lipson, founder and CEO of Real Magic, said that your small business marketing strategy can determine if your business idea is good.
“If you have a solid go-to-market strategy and a decent product, you’ll probably be successful,” Lipson said. “But if you have a great product without any idea how to reach potential customers, then it’s going to be really tough to make it successful. Thinking through that as early as possible is really key.”
As excited as you may be about a new business idea, staying grounded and realistic is essential. Thomas Gravina, co-founder and CEO of cloud services company Evolve IP, said you shouldn’t have a Field of Dreams mentality when starting your business.
“Just because you have a vision and decide to build it does not mean the rest will follow,” Gravina said. “While you may have an idea that is original, revolutionary or ahead of its time, there should be a real, solid market opportunity to ensure it is successful. Any new business case or new endeavor has to have a viable market that you believe you can sell now – not theoretically or on the premise that there is a future for this market.”
To generate a great business idea, start by analyzing your strengths. Ask yourself the following questions:
Sometimes you need a source of inspiration to spur that lightbulb moment. Try to find inspiration in the world around you. Here are four places to look for inspiration:
When you have a potentially great business idea, stop talking and start writing. Talking about an idea before doing some initial processing on paper tricks our brains into thinking we’re actually making progress.
Maybe you always have new ideas popping up in your head. Or perhaps you’re looking for that next big idea to catapult you into business success. Either way, use these strategies to hone your concept and turn your ideas into products or services for your successful business.
Matt D’Angelo contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.