At this point, you might have invested years into researching and exploring your business idea. On the other hand, your venture’s topic could have come to you overnight. Regardless of how your idea came to you, you’re ready to take the next step. You’ve come up with a business idea, and now you need to decide whether or not it’s a good one or not.
Here’s how to tell if your idea is worth pursuing:
It addresses below-the-surface issues
Products and services generally aim to make a customer’s life easier. There are many shortcomings in life that as an entrepreneur, you can turn into opportunities. Oftentimes, customers are aware of these shortcomings, often referred to as pain points. They’re immediately excited about a new company that uniquely addresses their issues and aims to improve them.
On the other hand, there are companies that fix issues customers don’t even know they have.
According to Tim Cook, CEO of Apple, “Apple has made products for years that people didn’t know they wanted and now they can’t live without.”
If you come up with an idea that no one else is carrying out and it has the power to greatly enhance your customers’ lives, it’s probably a brilliant idea.
Related: How to Validate Your Business Idea
It’s helpful to have a product or service that acts as a never-heard-of solution, but this isn’t a requirement for success. In fact, your business can be based on an old idea or common issue, as long as you address it uniquely.
In 1605, the first taxi service came into existence. They used horses and carriages to transport passengers. In 1908, the first car-based taxi service started running. Nearly 100 years later, Uber launched with a simple idea—tap a button, get a ride. Shortly after that, Lyft launched, and ride sharing became mainstream.
Your business idea doesn’t need to be one-of-a-kind, as long as it has a unique differentiator from other companies.
It’s more than a fad
“A lot of companies skim over the important background information because they’re so interested in getting their product to market, but the companies that do the best are the ones that do their homework,” Donna Barson, president of Barson Marketing, said.
Not every good idea will sustain a good business. Successful companies do market research on their ideas and understand that sustainability is the foundation for long-term success. If you have a cost-effective way to get your product and the demand is time-enduring and high, you have a worthwhile idea.
Some of the world’s greatest business ideas solve very specific problems.
“I found a successful business niche because I experienced an inconvenience in my own life,”Junaid Shams, co-founder of Rooam, said.
There’s nothing more frustrating than not being able to find something when you need it the most. For Shams, he could never seem to find his bartender or waiter when he was ready to pay his bill.
So, he co-created Rooam, a mobile application that puts you in control of your tab and lets you pay on your own time. Shams saw a specific, commonplace problem and worked tirelessly to solve it. It’s a simple formula, but it’s one that works across the board, no matter the industry.
It’s praised by unbiased parties
Although running your idea by friends and family can be helpful, it’s not always the most informative. People who are emotionally invested in your success may not be able to help your business succeed. If your personal circle and unbiased mentors or entrepreneurs like your idea, then it’s probably pretty solid.
“Often times, (you’re) too emotional about (your) business to make sound and rational decisions … Mentors aren’t invested in your business. Their thought process is clear, unbiased and logical, allowing for constructive criticism,” Julian Hayes, founder and CEO of The Art of Fitness and Life, said.
Your business idea needs to be easy to understand, even if it solves a complicated problem. In the eyes of Australian-born entrepreneur Kris Duggan, every good business should pass “the grandma test.”
In other words, could the average 74-year-old woman understand what your business does? If so, you’ll likely be able to explain your idea to consumers and investors quickly.
If you want your business to reach its full potential, you’ll need the right funding. From the moment your idea starts to take shape, there’s a need for cash. First, you need money to start your company. Next, you need money to maintain and grow your offerings. Even if you self-fund your project at the start, you’ll eventually find that you need more formal funding opportunities to keep growing.
Start off on the right foot
Once you come up with what seems to be a strong business idea, you’ll want to hit the ground running. It’s hard to step back and conduct market research and seek out unbiased opinions when you’re excited and ready to get started. However, if you want to succeed, you’ll absolutely need to slow yourself down and figure out if your business idea is worth pursuing before you start to make it a reality.