An idea that works
If you're itching to launch your own business, you need more than an idea. You need an idea that works. It helps to be passionate about both your concept and entrepreneurship in general, but it's critical to be realistic and well informed going into the process. An idea with self-evident appeal on its surface may not hold up to scrutiny, or might at least require some major adjustments. You need to do your homework to determine whether and how you translate your idea into a viable business.
Business News Daily reached out to entrepreneurs and other experts to find out what you should consider when you want to make your business idea a reality. These 9 questions will help you to flesh out your concept and figure out how to move forward – or not.
Does it solve a problem?
Entrepreneur and co-founder of the web design school The Starter League (which has been acquired by Fullstack Academy), Mike McGee thinks the best business ideas are those that solve a problem in some way.
If there is a problem that affects you, your friends, family, co-workers, etc., then the chances are high that it affects people you don't know as well," McGee said.
Will people will pay for it?
It's paying customers who 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 said. "Anyone can discredit a simple idea, but no one can discredit paying customers."
What's your price point?
Charlie Harary, founder and partner of investment firm H3 & Co. said that while there are many ways to solve problems, great business ideas do it 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," Harary said.
"Once you determine the price, then you can assess if your solution is businessworthy or not."
Is there a sizable niche market for it?
Without a large enough market, your idea may never get off the ground. You need to determine if a niche market actually exists for your idea. You're better poised for success if your business improves upon what's already out there – a novel response to a recognized need.
How can you tell if a niche market is, in fact, a market? It's a mix of "research, gut instinct and personal preference," according to Ari S. Goldberg, founder 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 said.
Are you passionate enough about it?
Your business will likely take up all of your time, so make sure you're passionate about it to make it successful. It's important that your idea is something you truly 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 an adjunct faculty member of Georgetown Univesity's McDonogh School of Business.
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."
Are you open to advice?
If you're not open to changing or adapting your idea to fit what your customers will 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."
How will you market your business?
Many entrepreneurs think about the problems their business will solve but not about how they intend to market their business to their target customers. Jesse Lipson, founder and CEO of Real Magic, said that your marketing strategy can determine if your business idea is a good one.
"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."
Are you being realistic about your goals?
As excited as you may be about a new business idea, it's important to stay grounded and be realistic about it. Thomas J. Gravina, co-founder and executive chairman of the board 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."
Additional reporting by Brittany Morgan.