Does Your Small Business Idea Hold Water?
Starting a small business from scratch not only takes initiative and a willingness to take a risk, it also takes ideas. Not just any ideas, but good ones that have the potential to attract customers and bring in revenue. But how does one know if their idea is a viable?
There are many factors that determine whether a small business concept is worth pursuing, including the uniqueness of the product or service, the demand for it, the amount and success of the competition and the chances of long term success. Taking the time to see if an idea meets these criteria before going any further may save a potential entrepreneur a lot of heartache and protect them financial loss down the road. The potential small business owner should ask themselves the following questions before worrying about financing or marketing:
Are Your Business Ideas Unique?
To determine if the goods or services being offered are unique enough to carve out a niche in today’s difficult marketplace, one must do a bit of research. If the product being offered is innovative, is it different enough from similar products on the market to attract attention? If the idea is not brand new, is there something unique enough about it to stand out from the crowd? This can mean that the product or service can be offered significantly cheaper or more conveniently or that, although the idea is not new, some aspect of it is. For instance, the idea of a craft store is not new, unless the owner intends to cater specifically to those who work in a specific niche, like pottery. To succeed, this business would need to offer a more extensive variety of clay and pottery working supplies than the more generalized craft stores, at a competitive price.
Is There A Demand For This Business?
Carving out a specific niche for a business, like a pottery store, is a good way to attract attention, but if the idea is too specific there may not be enough of a customer base to support it. The perspective small business owner must make sure that the uniqueness of their idea does not narrow the number of potential customers too far.
Again, research is needed to find out if there is a large and consistent demand for the goods or services being offered. It is a good idea to start this process by determining exactly what demographic your business would appeal to, both by age (i.e. the baby boomers, young adults, children and their parents, etc.) and whether they have the desire and financial means to acquire your product.
Can It Stand Up To The Competition?
Competition is what leads to the demise of many business ventures, small and large. Before risking money, time and energy on a new small business idea one must take the time to check out the competition. Take the time to visit the competitions brick and mortar or online stores. Pay attention not only to their apparent success but also the flow of customers and marketing techniques. This should give some insight into how to, or not to, attract customers. Remember, in order to succeed for the long term, the new venture does not need to simply meet the competition’s attractiveness to potential customers, but exceed it.
Will This Idea Be As Appealing In The Future?
Many business ideas and inventions are trendy and are wildly popular for a short period of time and then fade into obscurity. Think pet rocks, cabbage patch dolls and beepers. Whether an idea is going to be passed over because it has become obsolete or simply because the demand for it has faded does not matter. What does matter is that a business venture that cannot continue to show positive results for the long term is not a viable one.
Assuming that the entrepreneur has already done their homework and ascertained that there is indeed a demand for the goods or services, now he or she must try to determine the likelihood of that demand remaining high for the foreseeable future. The best results are often achieved by those ideas that prove to be adaptable. The marketplace is unpredictable and ever changing. In order for any business idea to stand the test of time it must be able to adapt to new situations without losing sight of its original goal. Any new small business venture requires risk. There are too many variables involved in achieving success to be able to guarantee it. When it comes to small business, there is no such thing as a sure thing. However, taking the time to see if an idea can pass the viability test may go a long way towards improving one’s chances of success.