Mindset
December 28, 2020
Written by Scott Lancaster
Read Time 6 Minutes

How to know if your business idea will be successful

Branding articles, how to build a brand, building a brand, starting a brand.

How can you know if a business idea is a good one?

Every entrepreneur in the world knows that there's no lack of ideas in the world, it’s figuring out which ideas are worth spending time and money on.

No matter who you are or how big you hope to grow your business, figuring out what product to build and what services to offer is a huge challenge.

Choosing to pursue a business idea is exciting, but also demands serious consideration.

Sometimes it could be a matter of guts or a hunch. Which is often good enough for most.

The next time you have an awesome business idea. They should give you a good sense of if it's likely to work out and be successful.

1. Be sure and document key assumptions

A business plan sounds great but let’s get back to basics.

What is your elevator pitch? An elevator pitch goes straight into the component of your idea.

An elevation pitch answers these three key questions:

What problem are you solving?

Who are you solving this problem for?

How scalable is your business idea?

The trick here is to write the component of your business to make sure your assumptions are accurate.

You don’t need to write a lot.

Just be sure you have solid answers for each of the questions above.

This will at least give you the reassurance that there is a place in the world for your business.

 

2. Talk to a potential customer

Here's a super important step which is often largely overlooked.

To reduce the risk of failure, talking to potential customers about your new business idea is a great way to go.

It costs nothing and can give you great proof of concept.

Let's face it; your idea is still largely untested.

So do not waste time. Step outside your comfort zone and speak to people about your idea and what you're trying to achieve.

As you interact with your potential customers, you’re trying to validate your key assumptions that you documented, for example:

Do they actually have the problem you assume they have?

How do they solve their problem presently?

What do they think of your idea?

“There is safety in numbers”. So be sure to talk to as many potential customers as you can so you get multiple point of view.

3. Get an idea of what people are willing to pay

As you talk to your potential customers, figure out what they are willing to pay.

Everyone will take your service for free, but will they actually part with their hard earned money?

A suggestion is to know how much they are paying presently for a similar product or service.

Look at your competitors pricing model. This will give you an idea of how much your target market are willing to pay you for your services.

You can also learn how to differentiate your business with unique selling points and create a price based on that.

It could be higher or lower. It could even be the same price in some cases.

Profit is the lifeblood of every business. A very strong indicator to know if a business is going to be successful.

4. Start as small as possible

Well, you can do all the permutations as you want but you can’t be 100% sure of an outcome until you get your hands dirty and try your idea out for real.

You could take everything you have and go all at it. Risking it all has a romance about it, doesn't it?

My advice is to resist the urge, start small and gather feedback from your first few customers.

This way you’ll be able to change direction faster and react to customer feedback quicker.

The ability to pivot and change directions quickly is much more valuable to your long-term success than trying to get everything right the first time.

5. Stay flexible

The final key to making sure you have a good idea which will grow into a successful business is to stay flexible.

Listen to feedback and being flexible enables you to adapt as you go and change direction as needed.

You don’t want to be streamlined. You want to look for broader trends in the opinions of as many customers as possible.

You may even decide that certain types of potential customers aren’t part of your target market.

This may help you decide that you only want to sell to a very specific type of clientele.

 

If you still aren't sure, we can help

Starting any business takes a huge leap of faith, but millions of people just like you and me launch businesses everyday. So it can be done.

If you want some extra reassurance and need some guidance in regards to bringing your idea to life, you can book a free 15 minute idea development session with our team by clicking here. It's always better to be safe than sorry isn't it...

Until next time, my friend.

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