How to come up with a business idea - Part 3
In previous posts, topics like how to decide whether you will be providing a product or a service, defining what USP is and how to come with the tentative business idea were addressed.
If you want to follow along, you should go read through Part 1 and Part 2 first!
If you miss it you can check it here:
This final post will address some tips that may help you to evaluate your ideas.
Before moving on to, think about if you could really follow through with this plan. For example, if you think you could open a great restaurant, but have never worked in one before and never attended culinary school, this idea is a little bit out of reach!
As soon as you think you have a business idea, investigate if someone has already done it. You definitely don't want to put months of work and financial investment into an idea, only to find out at the last minute that some have already done it.
To avoid this, make sure you do thorough research and find out if your idea is truly original.
Use an internet search engine first (like Google). Type in the service or product you have in mind.
You may not get an exact match, so follow all leads to determine if someone has already started a business like yours.
Plenty of new businesses have a lot of competition when they start, and they beat it by providing a better service or product. Now you have to investigate your potential competition.
Try becoming a customer of the competition. Buy their product or service so you can see first-hand how they operate. This way, you can examine your competition closely and find ways to improve their business.
There may be review pages or blogs that discuss your competition.
Read these carefully to find out if people are unhappy with anything your competition does.
Go to areas where people who might be interested in your business would be.
Give a very brief description of your proposed business, and ask shoppers if they would be interested in that sort of business. Be sure to keep your interactions short. While some people may be interested in talking further, most will probably get annoyed if you take too much of their time.
Always make sure you have enough financing before continuing. Many startups fail because of lack of funding.
Be willing to change. If you establish your business successfully, the market can still change around you.
Keep up with these changes to stay competitive.
Move on from failure. Many startups fail. You have to understand that this doesn't have to be the end, and you can continue with a better idea and better funding.
There are a number of components that go into evaluating your plan. Take all of them seriously to get a good feel for if you should continue with your plan.
Take into account all of the interviewing and surveying you've done.
Be honest with yourself here don't convince yourself that there is a market if only a few people were interested. If no one will buy your idea or product, move on to another idea.
What's your level of competition? If competition will be stiff, you'll have to work hard to outdo them.
Take some time to define how exactly you'll be better than your competition to give yourself a fighting chance. Think differentiation!
Do a cost analysis of your plan. Even if there is a good market for your idea, you have to find out if it’s economically viable.
If startup and maintenance costs are very high, perhaps you should reconsider.
Also, think about where will you get financing if you need it. Find out how much your plan will cost, and how much you can expect to earn from it.
When you've decided on which idea you'll focus your efforts on, you'll need a business plan before moving on. A business plan defines your company, the service it provides and projects the company’s potential costs and earnings. This will not only help you focus and organize your own ideas, but it is also essential for investors to see how profitable your business can be.
If you want to follow along, you should go read through Part 1 and Part 2 first!
If you miss it you can check it here:
This final post will address some tips that may help you to evaluate your ideas.
Evaluate your ideas
Weigh your strengths and weaknesses in relation to your plan. You may have a great idea, but no realistic way to implement it.Before moving on to, think about if you could really follow through with this plan. For example, if you think you could open a great restaurant, but have never worked in one before and never attended culinary school, this idea is a little bit out of reach!
Investigate if someone has already come up with your idea
If you've thought of an idea, it's very possible that someone else has also thought of it.As soon as you think you have a business idea, investigate if someone has already done it. You definitely don't want to put months of work and financial investment into an idea, only to find out at the last minute that some have already done it.
To avoid this, make sure you do thorough research and find out if your idea is truly original.
Use an internet search engine first (like Google). Type in the service or product you have in mind.
You may not get an exact match, so follow all leads to determine if someone has already started a business like yours.
Investigate the competition
If you do find out someone has already come up with your idea, don't panic.Plenty of new businesses have a lot of competition when they start, and they beat it by providing a better service or product. Now you have to investigate your potential competition.
Try becoming a customer of the competition. Buy their product or service so you can see first-hand how they operate. This way, you can examine your competition closely and find ways to improve their business.
Look at your competition's online.
There may be review pages or blogs that discuss your competition.
Read these carefully to find out if people are unhappy with anything your competition does.
Talk to potential customers
Once you've formulated what you think is a good idea and told a few close friends, you need to go out and see if there is a market for you. You can do several things to determine if anyone would actually patronize your business.Conduct interviews in person.
Go to areas where people who might be interested in your business would be.
Give a very brief description of your proposed business, and ask shoppers if they would be interested in that sort of business. Be sure to keep your interactions short. While some people may be interested in talking further, most will probably get annoyed if you take too much of their time.
Identify risks and obstacles
There are a few business problems many startups will encounter, so keep the following in mind.Always make sure you have enough financing before continuing. Many startups fail because of lack of funding.
Be willing to change. If you establish your business successfully, the market can still change around you.
Keep up with these changes to stay competitive.
Move on from failure. Many startups fail. You have to understand that this doesn't have to be the end, and you can continue with a better idea and better funding.
Determine if you have a viable plan
After all of this, you'll have to make a final judgement on whether or not your plan is doable.There are a number of components that go into evaluating your plan. Take all of them seriously to get a good feel for if you should continue with your plan.
Take into account all of the interviewing and surveying you've done.
Is there a market for your plan?
Be honest with yourself here don't convince yourself that there is a market if only a few people were interested. If no one will buy your idea or product, move on to another idea.
What's your level of competition? If competition will be stiff, you'll have to work hard to outdo them.
Take some time to define how exactly you'll be better than your competition to give yourself a fighting chance. Think differentiation!
Do a cost analysis of your plan. Even if there is a good market for your idea, you have to find out if it’s economically viable.
If startup and maintenance costs are very high, perhaps you should reconsider.
Also, think about where will you get financing if you need it. Find out how much your plan will cost, and how much you can expect to earn from it.
Wrapping Up - Making your idea a reality
After carefully evaluating and weighing up the different ideas you have, you should come up with one that is your best. This should be the one that you focus your efforts on. After choosing your best idea, start implementing steps to make it a realityWhen you've decided on which idea you'll focus your efforts on, you'll need a business plan before moving on. A business plan defines your company, the service it provides and projects the company’s potential costs and earnings. This will not only help you focus and organize your own ideas, but it is also essential for investors to see how profitable your business can be.
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