- While being passionate about your new business idea is essential, you must determine whether it’s truly a great idea that can propel a successful business.
- Great business ideas make money, solve problems, and have viable markets and thoughtful price points.
- If you’re trying to spark a business idea, examine your strengths and passions, and find needs to fill.
- This article is for entrepreneurs who want to determine if their business idea is viable or if it’s time to go back to the drawing board.
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.
What is a great business idea?
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.
How to determine if you have a good business idea
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.
1. Does your business idea solve a problem?
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.
2. Will people pay for it?
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.”
3. What’s your price point?
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.
4. Is there a sizable niche market for your business idea?
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.
5. Are you passionate enough about your business idea?
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.
6. Have you tested your business idea?
You won’t know if it’s viable until you test your business idea on strangers who match the profile of your target customer.
“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.”
7. Are you open to advice?
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.”
Find a mentor or career coach who can offer their advice and experience while helping you evaluate your business idea. If they’re in a similar industry, their feedback could be invaluable.
8. How will you market your business?
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.”
9. Are you being realistic about your goals?
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 set achievable business goals, be specific about your plan, find a support group to provide accountability, and visualize your success.
How to come up with a great business idea
To generate a great business idea, start by analyzing your strengths. Ask yourself the following questions:
- What are your passions? It’s crucial to choose something you’re passionate about and can see yourself doing day in, day out. For example, explore business ideas for fashion fanatics if you love fashion. If you’re excited about veganism, think of a vegan-friendly business idea.
- What do others tell you that you’re good at? If you’re the go-to person for certain chores or tasks, this might be a golden opportunity to turn that skill or talent into a business. Talk with your family and friends, and see what they think.
- What service do you wish existed that currently doesn’t? Say you search the app store for something specific, certain it exists, only to find it doesn’t. This is your chance. Pair up with an app designer or create an app that could benefit people like you worldwide. Consider problems that need solutions. Some of the most successful businesses offer products or services that solve problems for others.
You’ll know if your business idea stinks if experts advise against it, no one seems willing to buy it, no one wants to help, or you’re not even that excited.
Helpful sources to spark new ideas
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:
- Study successful entrepreneurs. It’s difficult to know where you’re going if you don’t know the path of great entrepreneurs. Read origin stories and study successful entrepreneurs in a similar industry. How did they come up with their business ideas? What advice do they have for up-and-coming entrepreneurs? Learn all you can before embarking on your journey.
- Use your smartphone. If you know you want to create an app, but you’re not sure exactly what you want to make, search the app store. Browse categories that interest you. Is anything missing, or could you vastly improve on an app’s premise?
- Search for similar products or services. The internet is incredibly helpful when finding products and services you need. But have you ever searched for something and been unable to find it? That should be a tip-off of a potential marketing opening you could fill.
- Turn to social media. People on social media are often quick to identify issues and problems with current products, places and processes. However, few take the time to create a solution. Reading through people’s grievances can give you great insight into problems you may be able to solve. Online review sites are another source of problems in need of solutions.
Explore your business ideas
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.