Think you’ve got the makings of a great business idea? Here are 10 key questions to help you determine whether you’re onto a winner.
1. How is it different?Your underlying business idea doesn’t need to be original, but you need to establish unique selling points (USPs) if you want people to buy from you rather than your competitors. You have to offer something new. Is your proposition solving a problem? Are you filling a gap in the market, or building on an existing offering?
2. Is there a market, and is it big enough?Thorough market research is needed before moving forward with your business idea. You need to ensure there will be sufficient – and sustainable – demand to support your business and enable it to thrive.
3. What’s the business model?How will you charge your customers, and what for? Can you think of additional revenue streams? Research is vital to determine whether your business model is viable; this should include analysis of how your competitors have structured their businesses.
4. Is the price right? It’s no good having a winning product or service if your customers can’t afford it, but you need a decent margin for a sustainable business. Talk to your potential customers to find out whether your pricing is feasible.
5. What will stop others from copying you?If you’ve ever watched Dragons’ Den you’ll have heard no doubt heard this question: ‘What’s to stop a big company coming along and stealing your idea?’ Have strong USPs – such as exceptional customer service – and wherever you can protect your intellectual property.
6. Do you know your customer?Arm yourself with as much information as you possibly can about your target customer, and listen to them at every opportunity. What does a typical customer look like? How do they behave? What do they most value from a product or service like yours? Where can you find them? What marketing methods do they respond to?
7. Can you turn a profit?How much will it cost to produce your idea? (taking into account manufacturing or supplier costs; salaries; overheads; office equipment, etc)? How much can you sell your product or service for, and how much do you need to sell to not only cover your costs, but make a profit? Is this achievable?
8. Do you have sufficient funding to get the venture off the ground?You need enough cash to support yourself and your business until it becomes sustainable. If you don’t have the funding in place, can you raise it?
9. Do you have the necessary experience, attitude and skills to pull it off?Even if you have the best idea in the world, without the passion, drive and commitment to see it through, it still stands a good chance of failing.
10. Is there scope for growth?Can you expand on your idea in the future by adding new products or services, entering new locations, or improving your original proposition?