“Nearly every man who develops an idea works it up to the point where it looks impossible, and then he gets discouraged. That's not the place to become discouraged.” Thomas Edison, inventor.
As many a successful business owner will agree, everything starts with a simple idea. By now, you’ve probably got a great idea for a new business, and you’re raring to go – but how can you tell if it’s actually going to be a success?
Well, short of a crystal ball or a time machine, there’s no way of knowing for sure whether your big idea is the one that’s going to turn you into a successful entrepreneur. But there are a few ways you can test the waters before you jump in!
Listen to your instincts
While there’s no reason you should already know everything about the industry you’re about to try and excel in, it should feel like the right one from the very start (even if it turns out it’s not!).
What’s your advantage?
Richard Moross, founder and CEO of MOO, had no contacts n the Print industry when he started the company – what he had was a very strong belief in the uniqueness of his idea. Which means that even if you’re a novice in the market your idea falls into, there’s no reason hard work and research shouldn’t make you successful.
However, there’s no reason you shouldn’t also try and play to your strengths, especially if this is your first time setting up a new business. So ask yourself some tough questions:
- Who are your contacts?
- What are your specialties?
- What unique abilities can you bring to the table?
- Do you have the time to make this work?
Know your market
Take a simple product – let’s say toothpaste. That’s one market, right? But then there’s toothpaste for sensitive teeth, whitening toothpaste, brightening toothpaste, children’s toothpaste…the list goes on. Within every market, there are a huge number of sub-markets, and the more niche you are, the better chance you’ll have of making your mark.
Ask a friend to do a Q&A with you, asking you the following questions (just as a starting point – feel free to add as many of these as you can think of!)
- Who are your customers?
- What do your customers want?
- What do your customers do?
- What do they want from your product
This should help you work out where your product or service stands, who it’s currently aimed at – and whether there’s room for expansion. It might even show you that there’s a gap in the market you hadn’t realized was there.
Do your research!
There are a few simple ways you can do market research for free before you start spending any money. The beauty of the social network explosion means that you’ll be able to find out quite easily if your own personal contacts would be interested in the product or service you’re considering.
- Set up a survey on SurveyMonkey and send it to your friends – real and on Facebook! Get them to circulate it, and get as much data as you can. Really think about what questions you need to ask – data such as “How much would you pay for this product” is invaluable when later considering your potential profit margins.
- Talk to everyone – and anyone! Ask strangers, people at parties and anyone else you come into contact with what they think of your idea (if it’s entirely unique, try not to be too specific – you don’t want anyone to steal it!). Informal chats are just as valuable as survey results – as long as you remember to write down what you find.
- Keep your eyes and ears open! Tools like Twitter, Google Insights and Google Trends are always buzzing, and magazines and newspapers are always on top of trends, and sometimes even ahead of themselves. If there’s zeitgeist in the air, can you fit your business into it?
- Browse the web! There’s a great site called Springwise which has hundreds of ideas from entrepreneurs on it – its great for identifying popular markets, or even for trying to predict which markets are up and coming. And places like Focus.com allow you to ask questions about your idea and get answers from business experts – remember, friends often don’t have as much expertise as you need.
- If you’re making a product, try selling on eBay or Etsy after you’ve done some market research – if nobody buys it, it’s probably not a great product!
Ask yourself the right questions
There are no easy answers to these questions – they involve research, time and patience. But they’re worth asking – particularly if it’s your money you’ll be spending!
- What is the profit potential of this idea?
- What is the degree of financial risk involved?
- How easy will it be to start this company?
- What funding will I need?
- Is this a sustainable idea?
- Is this industry overcrowded?
Give each answer as a mark out of ten – then decide if you’ve scored high enough to jump in.
If you’re happy with your idea, and you’re ready to get started, fantastic! Check out our Expert Tips gallery regularly for more features on starting a successful business – and in the meantime, make yourself some new Business Cards! If you’re feeling uninspired, why not find new ways to spark your creativity?