How You Can Tell If You’ve Come Up with the Right Business Idea
Nearly 50 percent of US entrepreneurs who responded to an Organization for Economic Cooperation and Development (OECD) survey reported that the main motivation they had for starting their business was to pursue an interest or hobby, and approximately 45 percent reported that their motivation was to make more money. If you’re hoping to start a business, whatever the reason may be, you first have to start with the right idea. Brainstorming business ideas can take anywhere from a few minutes to a few days, weeks, or even months, but finding the right business idea can take even longer.
While there are plenty of good business ideas out there, there are plenty of not-so-great ideas as well. And even if you have a good idea, it may not be the right idea for you. So, how can you tell if you’ve come up with the right business idea? Below are a few indicators that the business idea you’ve got on your brain is the right one for you to pursue.
The Numbers Make Sense
Starting a business costs money. Even if you plan to bootstrap, there will likely be at least some expenses you’ll have to cover to get your business up and running. It’s important to sit down and calculate exactly how much you’ll need to take your business from the idea phase and turn it into a full-blown operation. You’ll also need to consider whether or not the price point at which you have to sell your product(s) or service(s) makes sense and will appeal to your customers.
Once you’ve calculated everything, looked at how much you’ll need, and considered how much you’ll have to charge to make things work, you can decide whether or not the numbers make sense. If they do, then you’re off to a great start.
Your Product or Service Solves a Problem/Helps Others
There is a lot to consider when deciding whether or not your business idea is the right one. Not only do the numbers need to make sense, but your product or service has to offer value as well. Generally, if your product or service solves a widespread problem, relieves a pain point, or helps others in any way, it’s a product or service that adds value. For example, Studypool is a company that offers students study tools and homework help and gives would-be tutors a chance to help out.
As simple as the idea behind Studypool may be, their services help people solve problems and get help, making it a valuable business. If your idea will solve any problems or help others in any way, then you’re on the right track to having the right business idea.
You’ve Talked to Your Target Market and They Love the Idea
One of the best ways to tell whether or not your idea is a good one is to throw it out there and listen to the feedback that comes back. While you can run the idea by family and friends, if they’re not part of your target market, you’ll want to run it by people in your target market as well. If you let them know about your idea and your product or service and the feedback is generally positive and comes with excitement, then that’s a good indicator that you’ve got the right business idea.
The Market Research Proves There’s a Need
Market research takes time and effort, but it’s an important part of exploring a potential business idea. Not only does your target market need to like your idea, but they also need to have a need for it. If there’s not a need in the space for the product or service you plan to offer, even if it’s a great product or service, it’s not likely to do well. If you do the research necessary and discover there’s a need in the space, though, you’re on the right track to having the right business idea.
Your Business Has Benefits that the Competition Can’t Offer
It’s been said that there are no original ideas. While that saying may feel true if you’re trying to come up with a unique business idea of your own, the truth is that your business idea doesn’t have to be 100 percent original to be the right idea or to do well. You could offer a similar product or service to other existing companies out there, but if your product or service includes something that your competitors don’t or can’t offer, then you can feel confident that you’ve got a good business idea.
Your Business Couldn’t Be Easily Copied or Overtaken
Not only does a good business idea have something that competitors can’t offer, but it has something that makes it difficult for competitors or other companies to copy or take over. Some ideas are good but will be bought out or out-competed by larger companies in a matter of months. If your idea includes an element or aspect of business that cannot be easily copied or overrun, then you can feel confident that you’re on the right track.
You Can’t Get the Idea Out of Your Head
Some business ideas stick with you, even if you’re in the middle of another project or starting another business. For example, Studypool’s founder, Richard Werbe, is also pursuing his own side project, Apollo Club. Even if you have an existing, successful business, if you have another idea that you can’t get out of your head and keep coming back to, that’s an indicator that your idea is worth looking into further and possibly pursuing more aggressively.
In Conclusion
Coming up with the right business idea can be difficult. Sometimes you may already have the right business idea without realizing it. By looking into the numbers, considering the need in the market, and giving your idea a competitive edge, you can feel more confident that your idea is the right idea and is worth the time it will take to pursue it.
What else makes you think you’ve found the right business idea?