14 Feb Is Your Business Idea Your Next Golden Egg?
You just had an epiphany and this brilliant idea fell into your lap? Now you are all fired up? You can hardly wait to get this new business started? Stop! Before you burn lots of money – do a little research. Can this idea become your next golden egg? Does it have the potential to make you happy and rich? Find out!
Turning your idea into a product right away and trying to sell it in the market would be the best success indicator. But why would you ever walk down a path if you had no clue where it leads to? Unless you just love the adventure of exploring new ventures and you have unlimited money and time, you probably rather want to know where you are going.
At this very early stage, you might not want to invest a lot to run a thorough market research.
You need a quick and easy approach to find out if your business idea is a smart one. Check out the 3-M-Principle to evaluate your business ideas.
THE 3-M-PRINCIPLE OF A ‘SMART’ BUSINESS IDEA
1. Myself: Is your Business Idea the Perfect Fit for YOU?
- A good indicator for a good fit is when you are passionate about it. You are likely to spend most of your time to build your business for the next few years. You will get more No’s than ever before in your life, your bank account statement and relationships will suffer. Only if you have crystal clear reasons and a strong passion to turn your business idea into a viable business, you have a chance to succeed to make it real.
- You want to change the world? Davy Kestens, founder of TwitSpark who raised a million funding capital within 3 months, is saying that the only good reason why someone would want to start any business is their craving to change the world in some way. You want to solve a problem that no one addresses today and you cannot stop thinking about it? You feel that strong itch to make it happen? You might just have found your golden egg.
- Make sure your idea is in line with your values. If you strongly dislike smoking you will not want to develop a new cigarette taste. But you might love offering health improvement programmes if you are passionate about well-being.
- What are your interests? If you are out in the nature jogging every free minute of your life you might want to design new running shoes. But you might hate sitting in an office 12 hourse a day crafting theoretical concepts.
- Will you be able to use your strongest skills and talents while working on this business? When you are doing what you are good at, it will be easy and fun. Chose your business idea wisely to use your biggest strengths as building a business in itself is challenging enough.
To find out more about how to Create the Perfect Fit between You and Your Business LISTEN to Nick Lore, the founder of the Rockport Institute, who helped more than 14.000 people design the business or career that fits their personality and natural talents perfectly.
2. Market: How Easily will You Fint Clients that Crave to Buy?
- How big is your potential client list? How many individuals or organizations might be interested in your offer?
- Are your potential customers ready to buy? Is your product a real must-have? Will it save them significant time or money, or will it make them more successful, wealthier or happier? Are they aware that they need what you offer? What is the return-on-investment for your clients and how fast will they get it? Your offer needs to be crafted so that your customers can easily and quickly benefit from getting significant value.
- How easy is it for you to reach your clients? Are many of them gathering at the same place, offline or online, so that you can easily talk to many of them at the same time? A lot of startup entrepreneurs underestimate the time and effort it takes to build a solid customer base.
- Is your business idea offering a real competitive advantage that cannot be easily copied? Why should anyone buy from you when there are already alternative products available? And even if you have this special extra to your offer, how long will you be standing out? Aim for having more than just one competitive edge! For example, Günter Faltin with his Teekampagne (German) became the biggest Darjeeling importer worldwide as they offer the tea at a 3rd of the standard market price, at a higher quality and with very transparent business processes. Their well thought threw business concept eventually earned them more than 500.000 loyal clients over the last 10 years.
3. Money: Can you turn your brilliant business idea into a fortune?
- Are your potential customers happy to pay for your products? Is your business idea a good fit for a market of buyers? If you offer just another mailing solution or a similar application that many people already use for free, you might add value but you cannot expect the big buck.
- Is there a budget available to buy your product or service? People spend money regularly on groceries, on sports and on holidays. Companies regularly have budgets for training, for IT equipment and much more. Which of these pots can your business idea tap into?
- Does your business idea have the potential to generate profit? Some industries are known for lean profits as their fixed cost are very high. Does your business idea fit into a high profit market? Can you produce and sell your offer at a lower cost than what your clients are ready to pay? You might not have all data available to make a thorough calculation, but you are well off making a rough ‘beer mat’ estimate before you waste a lot of time, money and effort.
- How scalable is your business idea? Will your clients need your product or service again and again? Does your idea make room for upselling? You want to retain your customers and extend the size of your offer over time to build a solid business foundation.
After evaluating your ideas based on these criteria, which one has the most potential and is the best fit to who you are? If none of them, you better go back and explore some more until you find your own business idea that really strikes you.
If you are clear what business you want to build, what are the first steps to turn your idea into a viable business? This is what we will address in our next blog.