One of the hardest things in entrepreneurship is to decide on a business idea that actually works and that is feasible enough to be turned into a successfully run business. This is probably what makes entrepreneurship an exclusive career.
Not everyone is able to come up with a good idea that is realistic in their situation, sustainable, profitable, with a good market and that aligns with their passion enough for them to risk time and invest finances into.
People simply don’t know what questions to ask when deciding if an idea is a good one or not. This is usually where business consultants come in but here are seven questions you should ask yourself to either determine if an idea is feasible enough to pursue in their particular situation or to see whether an idea you already have is the right one for you.
While each individual’s situation is different, these are universal questions you can ask yourself personally and introspect in order to come to a conclusion based on your individual situation. Your conclusion should you decide on a business idea that will suit you best.
1. What are you passionate about?
When you look into what you are passionate about, there is a chance that you can come up with a business idea relating to the things that interest you.
This is often a good way to come up with a fresh business idea and if you pursue it, the chances of you succeeding at it are higher because it is something you are passionate about. Hence this is the first question to ask yourself, whether you are trying to find a business idea or you have one and are trying to figure out whether to pursue it or not.
Passion is one of the keys to making it as an entrepreneur. There are hills and valleys on the entrepreneurship journey and to be able to survive the valleys you need to have a passion for what you are doing otherwise you can be easily discouraged and find yourself quitting.
The chances of you making something work because you are passionate about it are higher than when you are not.
Life is also too short to not be doing what you are passionate about. So unless you are in a situation you can’t control, only pursue what you are passionate about so that the journey is not a burden for you.
2. Is it sustainable?
Sustainability is one aspect that is easily ignored by starting entrepreneurs but it is very important to look into if you want your business to be around for a long time.
Most times trends determine the sustainability of a business idea and studying this can help you see whether your business is sustainable or not.
With this, it can go one of two ways; if you choose a niche that is trendy at a specific time or is seasonal to a specific time in life which can potentially be very profitable, but when a new trend comes in you will run out of business unless the business has the flexibility to adjust to the new trends, or you can examine past trends to examine where it is leading to or what has been constant throughout the lifespan of the trends and come up with a suitable business idea that will be either constant or is able to defy the trends.
I found the graph below on Shopify’s blog, and it’s a prediction of the rise in the revenue that will be generated in the fashion industry over the years until 2022. With this, you can see that the fashion industry is predicted to grow over the next couple years meaning it is a sustainable business to enter.
This is the kind of information to look for when pursuing a business because it gives you an idea of whether it is sustainable or not.
3. Is it profitable?
Unless you plan on starting a non-profit organization, this should be a question on your mind when pursuing a business idea. Is it going to make you money? Does it have the potential to be profitable? If not, then why would you want to start it, unless maybe it’s a hobby or charitable act you want to carry out.
But don’t just end at asking if it’s profitable; ask HOW profitable it is exactly. You don’t want to spend time building a business that will only earn you 10 cents profit per product cause you’ll be wasting your time.
If the idea is profitable how much profit exactly can it generate? This is important to know especially if you’re going to quit your 9-5 job. If the idea is going to make you way less than what you’re currently getting at your job even when it’s established then you may want to reconsider if the money is the main factor for you.
4. Is there a gap in the market?
This is one of the best ways to come up with a business idea. What is lacking? What is missing? What do people need that is not available? What would people buy if made available that is not currently available?
Most times the answers to these questions are a business idea. It’s usually what separates innovative ideas from ordinary ideas. Innovation is what drives our world today so it’s very profitable to come up with an innovative idea.
If you can figure out how to make a non-existing product or service, available then you can turn that into a business idea. And if you are the first to come up with that idea, you can easily dominate its market.
Something interesting I’d like to add is this; do you know that you can train your mind to think like this? To always look for gaps in the market or to find what’s missing or what could be fixed. It’s like those people who always see what’s wrong instead of what’s right except in an entrepreneurial way.
5. Is there a good market for it?
Are there potential customers for the good or service? Would people be willing to part with their money in order to purchase that service or product? And more importantly, would you pay for own product or service if you needed it?
If there’s no potential market for it, the chances of it succeeding are very slim. The chart in point 2 above illustrates in a predicted revenue increase in the fashion industry. This means that there will be more money to make in this industry over the years meaning that there is a good market for it.
This you can easily figure out because everyone needs clothes and as the human population is growing, there will be more and more people who will need clothes. So make sure there is a potential customer base for your idea before you execute it to avoid disappointment.
A way to test this is to have a questionnaire or to ask around. Ask people if they would be willing to pay for a specific product or service? And see what their responses would be.
If it’s something that’s new to the market or a new invention, then find out whether it’s a “need” or “want” product and decide from there. Most times “needs” have higher chances of success than “wants” but this is not always the case.
6. Is it realistic?
This may sound like a silly question to ask but it’s important to ask this. Is your idea realistic? You can’t start a business that sells surfboards in a landlocked country in Africa. It’s not realistic.
To establish whether your idea is realistic or not, you need to use common sense as well as research. This ties to the previous two questions is there a gap in the market for it and is there a potential customer base for it. But don’t end there; is the idea feasible and realistic in your environment?
7. Can you handle it?
So this question is referring to finances, time, and resources, which I believe are very important to start a business. After you have answered yes to all the questions above, do you have the finances to start the business, the time and resources to run it?
Most businesses require capital to start. Some require as little as your pocket money while others require huge investments that you may have to take a loan for.
Unless you have assets to back up the loan or have a well-paying and established career or a guaranteed customer base, I wouldn’t recommend taking out huge loans that you can’t afford to start a business. Why? Because businesses carry risk and if things don’t go your way, you will be in trouble and you’ll increase your blood pressure and stress levels from avoidable things.
Anyways, you need to have the finances or capital to start the business unless it doesn’t require initial capital.
You also need to have the time for it. For example, if you are working a 9-5 job, you can’t start a job that requires you to be present at those hours unless you plan on quitting your job or hire someone else to run it for you.
If you can answer to all these answers then chances are your idea is ripe in your case. You can then further research into how to execute it and make it a reality. This is not to say your idea won’t succeed if you can’t answer positively to all these questions.
There are people running successful businesses they are not passionate about for example or who have pursued unrealistic ideas and made them work somehow. This is a general guideline that will help you to decide on a business idea.
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