Hopefully, we are all familiar with that moment we had a great business idea. You saw it all happening for you, customers, money, receiving awards and growing the business. And then, you started wondering if you should pursue the idea or not. If you pursued the idea you got your answer one way or the other. If you are not part of that group and the idea is still in your head this article will take you a step closer to knowing whether or not you should pursue a business idea. The questions are based on research and experiences of those who have started and what they found out along the way.
Have you done your research?
When I ask this question the answer is always “yes”. Emphatically at that. However, when I ask “drill down” questions like the average invoice size, the margins and support systems required the truth reveals itself. And this is the whole point. You think you have an idea until you have answer questions from someone who has decent experience in the business. So before jumping into that idea perhaps do some deep research.
Do you have a target market?
Another question I love to ask which usually blows things wide open is “who are your target customers”? While there is no completely right answer I can tell you that the less detailed the answer the less likely it is that you have a business idea and more likely you have a fantasy. A good answer looks something like “our customers are small businesses which want an internet presence through a website and are looking to pay $200 a year including running costs”. A bad answer is something like “everyone”. Please understand, you can have everyone as your customers but targeting everyone is really difficult.
Test the idea
In my opinion, the most important thing to find for a new business is customer number 1. If you have read many articles of mine you are probably sick of reading “a business is a customer”. I still stand by it. Customer number one is important for many reasons but we can roll them all up into the phrase “proof of concept”. With a real customer number one or a few test customers, you have a feeling for the true cost (money, time and energy) of doing business as well as the processes involved and true profitability to know if the idea is scalable and how much.
Do you have the time, energy, resources?
The reality is running a small business will demand a lot of you. Particularly the aforementioned time, energy and resources. Do you have what it takes to do it on a large scale? Is the product scalable along any of these measures? Do you have it in you to deliver consistently? We want the answer to be yes to all but reality often differs from that.
Is the timing right?
This is more a problem for people who want to establish new businesses in a new market so to speak but we all need to consider for our business ideas. Is the timing right for the product? Skype was a great product in the mid-2000s as were other mobile messengers like ICQ and MSN. However, they were both ahead of their time. For those in existing markets consider whether the market has hit saturation yet. This is a period typified y widespread competition, decreasing margins and change in customer expectations.
have you planned for this?
Do you have a plan? Do you have a solid written and researched plan for the business or are still just thinking? Business plans are great and there is Startupbiz for that. But you will find that you will need a greater plan outside the business plan to support it. Your life will change. Time, money, energy will all need to be directed to the business and that responsibility will all fall squarely on your shoulders. So get the business plan from Startupbiz but add to that a plan for your new life. And I know someone is thinking you cannot plan for what you don’t know but it is better to have a plan and change it than to have no plan.
Assess yourself and your business idea honestly when it comes to these things. You will know if you are ready to start that small business or perhaps you need to spend a bit more time in the metaphorical lab to get your formula right.