The pandemic has made it very clear that being a business owner is a risky venture, and unfortunately many people fail for a variety of reasons. I have previously discussed important resources for small businesses and what you should know before starting your own business. I strongly recommend you read both of these blogs in addition to this one, which will primarily discuss if your business idea makes sense.
In this blog, I provide some suggestions and questions you can ask yourself, to see if your business idea will work:
1) Demand: This one is pretty straightforward. Is there any demand for what you’re thinking of offering? It’s imperative you do your research and gage demand for the product/service you plan to offer to your community. In one of the above blogs I highlighted, there’s many resources you can take advantage of to get to better know what your community may want. It is also a good idea to connect with the community you plan to sell to, and offer them your products/services and see if they would want to pay for it in the first place. Your friends and family may also be good sources of knowledge, to help gage general demand. Finally, the most important question to ask is this: will people actually pay for your product/service? People can say they love what you’re offering, but if the price is too high, or they simply don’t want to buy it, then your business has failed before it has even launched.
2) Competitive Edge: What makes you/your product stand out from the rest? Are you offering a better price? Do you have greater expertise than others? Is the next nearest location that offers a similar product or service located very far away? Do you have a cohesive marketing plan to ensure people will know about your business? If you’re just another typical business with nothing differentiating you from the rest, there’s a much higher likelihood that your venture will fail in the long run.
3) Financially Sound: Too many businesses launch without doing a deep dive into the financial feasibility of their undertaking. Do the math and make sure you’d eventually be making enough money to support you and the lifestyle you’ve envisioned for yourself. The first few years for a new business can be especially challenging, so it is a very wise idea to set aside enough cash for rainy days, and to realize that it takes time to scale a business. Figure out the approximate costs of what you believe you’ll need to launch your business. Will you need certain equipment? Do you need to rent out a large space? Will you need to hire any employees? Will you need to hire a lawyer? These questions are important for you to address, and can help you better determine if your business idea is a good one.
4) Solving a problem: Is your business idea solving some sort of problem? Generally speaking, the best business ideas attempt to solve a problem or need that people have. To give an example, bidets are a great solution to toilet paper as they are more environmentally friendly, do a better job at cleaning versus toilet paper, and they helped us deal with the great toilet paper shortage of 2020 that we encountered early on during the COVID-19 pandemic. Whatever your business idea is, it should ideally solve some sort of need or problem for your potential customers.
Need more great ideas to help you get started? Check out some of the books below, so that your business can stand out from the rest.