Ideas for businesses are easy to come by. People have them every day. How can you possibly know if your idea could be successful? There are hundreds of variables that have to all fall into place to make a business work, but the following can help you know whether the idea itself is a winner or a dud.
Do You Have the Skillset?
Can you actually, practically do what you want to do? Do you have the skills necessary, can you get the skills necessary, or can you find someone with the skills necessary and pay them to do what needs to be done? You cannot open an ice cream parlor if you do not either know how to make ice cream, are willing to learn how to make ice cream, or know someone who does know how and is will to do it for you. The same goes for a beauty salon, a pet groomer, or any other business you wish to start.
Is There Demand?
Maybe you want to start a drop in babysitting business in a local shopping area because you see the need for mom’s to be able to shop alone. That would mean there is definitely demand, and if all the other variables work out, you could have a winner. That is not to say that you could not make the same thing work even if there were competition.
Find a Twist
If there is low demand, you can still make things work. The key is to find a twist that makes your business different from the competition. Of course you want superior service and quality, but could there be something else? Could your drop off daycare offer a playground where others do not? Could your ice cream parlor offer made to order flavors or gourmet popsicles? Finding a way to make your idea a little different and a little better can eliminate competition and any demand issues.
The Price and Profit Balance
Can you offer your idea at a fair and reasonable price for the market? Is there cost low enough that you can set your price at a level that is affordable for your main customer base and still make a profit? If you are in a low income area, you might not be able to offer drop in childcare with a playground at a reasonable price compared to insurance and building costs. If it is too inefficient to make ice cream to order by flash freezing or some other method, it may cost too much to be profitable based on what you have to charge. This is where market research comes in during the early planning stages.
If your idea does not meet all of these it is not a guarantee it will fail, and if it does fit each of these to a tee there is still no guarantee it will be successful. There are too many other variables that come in to play. This is a good start when it comes to considering whether or not the idea actually has a chance however. It can get you going in the right direction and help you determine whether or not you even want to pursue your idea further or find another idea on which to focus.