It can be very frustrating when you have an idea to work out whether or not it is a good business idea. In my experience of mentoring business start ups, I have found the best ideas are the simple ones. The most important thing you need to think about is the sustainability of your idea.
If you can test your idea for free great – do it NOW! You are 99.9% of the way to having a successful business if you’ve tested your idea. Can you do something like create a landing page to track visitors. You don’t need an expensive website to test your idea, nowadays a WordPress will suffice, so if you haven’t got one what are you waiting for? Do it NOW and come back to the blog, it won’t go anywhere. I’m not joking click on WordPress sign up and then come back to this blog post.
This post is all about testing the basis of a good idea, using my trusty I CAN DO IT principles. In addition to my I CAN DO IT guide to great idea principles, you must make sure that your idea is sustainable; it needs to be something that you can sell to customers on a repeat basis. This requires being able to create interest for your product and to be able to convince people that it has the value that you have put on it.
In your projections you must make sure that you have considered all overheads, it’s amazing how many people forget things like rent, salaries, delivery costs, VAT, National Insurance, Petrol, Travel costs etc in their costs. It is not as simple as saying that product x will cost £1 per unit, I will sell 1,000 units at £2 and make a £1,000 profit – how many other costs were considered? Have you considered all costs, especially if you grow?
You need to define your route to market, I mean it makes me laugh and it’s quite entertaining when people talk about how they are going to offer a service to rival Facebook or a similar sized business. Facebook didn’t start with 500,000 users or a global business plan so why should you try/need to? Make it simple and think of singular units, how are you going to attract your first 5, 6 paying customers?
Another peculiar thing some of my clients do is come to me and say, Dwain I have this idea that nobody has done before. What the person had failed to do was change the description they were putting into Google. For example they were putting in something like “places to park” when really they needed to search for “rent my drive”, because their idea was around creating a website to make use of space on peoples drive. A great idea yes – a unique one no. Your idea does not have to be unique in conception but do need to be unique in delivery i.e. be faster, cheaper, more reliable or add better value to the end user than your competitors. What is unique/different about your idea?
If your idea needs Dragons Den investment then it’s not a start up business and you are off the mark. I think if you have to spend more than £250 to get your business of the ground then you are treading a very dangerous line. I say this with the consideration that income is relative, but if you have more than £1,500 to gamble then you might want to consider something else – business shouldn’t be a gamble. Can you think of cheap but efficient ways to test your idea?
You need to be passionate about this idea, the only thing that should stop you from thinking of the business or working on the business is the necessities, working (if still employed), sleeping, eating and relaxing. Yes I say relaxing, because your life should not be overwhelmed by the business otherwise you will lose the passion. Is your idea something you are truly passionate about?
If your business idea cannot be explained very simply to an uneducated non-specialist then it’s very unlikely that it will succeed. When you are trying to sell an idea you need to think of the benefits. A good way to practice selling your product is by pretending that you are in a lift and you have about 30 seconds to sell your investment to your first customer, how would you describe it? What are the benefits to them?
Often people forget that the quicker a business is not about ‘I’ the more successful it is likely to be, I cannot think of one example where a successful business has been created by I. You may be a great visionary, but you are going to need a practical person to turn your idea into a success. You may be able to sell ice to the Eskimos, but do you know the difference between your profit and loss account and your bank account? Find people that can make up for the weaknesses you have – can you think of places you can get the expertise?
Starting a business with the right guidance and support is easy, read the paragraphs above again and make sure you can tick off each of the requirements in the guide to having a great idea. I CAN DO IT idea short PDF.
I hope this was simple and informative, if you have an idea and would like feedback please leave a comment on my blog. I promise I will respond.