The primary activity when you get a business thought is decide if it’s a smart thought. Only one out of every odd thought that appears to be great at first is useful. What’s more, some business thoughts have no market. You’ll have to do some examination to assess your business thought. Here’s an agenda of inquiries to use as a guide:
- Is there a need for this product or service? Some of the most popular products and services meet a need that people currently have. The product or service may improve upon or complement an existing product or service, or your idea may be a completely approach to meeting a need.
- Is there a desire for this product or service? Admittedly, some of the most popular products are desire-based rather than need-based. That means that someone is purchasing the product because they want to. A few needs-based reasons for a purchase include to increase status or to follow a trend.
- Who is currently meeting the need for this product or service? Answering this question gives you a start on evaluating your competition. You need to know not only who your competitors are, but also how many of them there are. Don’t forget to consider indirect competition.
- Who will buy this product or service? Find out who your typical customer is likely to be. This may involve conducting surveys, testing the waters, finding a focus group, and more. The better your understanding your potential customer, the more likely you are to create a successful business.
- How big is that market? You may have a great business idea. It may even be brilliant. But, if the market for your idea is very small, your business might not be viable–that is unless people are willing to pay a premium for your product or service. Which brings us to the next question.
- How much are people willing to pay for your product or service? Your intake from your product or service needs to cover your costs and should include a healthy profit. Remember, that even a small niche market can be profitable if potential customers are willing to pay you enough money.
- How hard will it be to implement the idea? Let’s face it, some ideas are easier to implement than others. When answering this question, take into consideration the amount of time it will take you to launch your business as well as whether or not you will need to hire someone to help.
Here’s a brief overview of the seven steps it takes to start a business:
- Research. You’ve already gotten started on your research with the questions from the first section of this post.
- Plan. A business plan outlines how you will proceed and can be crucial to finding funding.
- Fund. Many business ideas require funding. Fortunately, there are new sources of funding available.
- Develop. You’re ready to put your idea into motion.
- Test. Many new business start with a trial (or beta in the software world) to test their idea and remove any problems.
- Market. Even the best business ideas need to be promoted to attract the customers you need.
- Evaluate. Whether your idea was a success or a failure, it’s important to stop and review what you did.
Now that you’re familiar with the first steps that you should take with a new business, let’s go into a little more depth on the one area that many new business owners struggle with–finding funding.