Ready to take on the world of entrepreneurship? In order to find startup success, you need a great business idea. But a winning business idea is more than just something you’re excited about or good at — you have to make sure your idea is actually viable.
Does it solve a problem?
Entrepreneur and co-founder of the Web design school The Starter League Mike McGee thinks the best business ideas are those that solve a problem in some way.
“If there is a problem that affects you, your friends, family, co-workers, etc., then the chances are high that it affects people you don’t know as well,” McGee said.
Will people will pay for it?
It’s paying customers who validate an idea and determine which ones have the greatest chance for success, said Wil Schroter, co-founder and CEO of Fundable.
“An idea is just an idea until you have a paying customer attached to it,” Schroter said. “Anyone can discredit a simple idea, but no one can discredit paying customers.”
What’s your price point?
Charlie Harary, founder and partner of investment firm H3 & Co., said that while there are many ways to solve problems, great business ideas do it in a way that is less expensive than what the market will endure.
“Once you have determined that you are solving a legitimate problem in a scalable way, you need to determine not only the value that it delivers to the world, but what people would pay for that value,” Harary said. “Once you determine the price, then you can assess if your solution is business worthy or not.”
Is there a sizable niche market for it?
Without a large enough market, your business idea may never get off the ground. Ruben Soto, CEO of shapewear company Hourglass Angel, said your business should cater to a strong niche market.
“Start by focusing on a niche market you know that can be served better,” Soto said. “Make sure the market is large enough and that you can serve those customers better than the alternative. Large companies won’t focus on niche markets, so there is room to compete and exceed customer expectations.”
Are you passionate enough about it?
our business will likely take up all of your time, so make sure you’re passionate enough about it to make it successful.
“Since starting a business requires an inordinate amount of time, energy and patience, ideally, the idea will be one that you are passionate about, as well as one that you have skills or experience [in],” said Melissa Bradley, executive-in-residence and director of entrepreneurship and innovation at the Kogod School of Business at American University.
Have you tested your idea?
You won’t know if your business is viable until you test it on strangers.
“Test it — not just with friends who will be too polite to tell the truth, but with honest people who would make up your ideal target audience, and then listen to the feedback,” said Lisa McCartney, chief “PLYTer” at educational math board game company PLYT. ”
“If your target sample is saying [your idea] is fantastic and [asking] where can they get it, you know that you’re onto something, but if they are less than enthusiastic, it’s probably not as good an idea as you thought.”
Are you open to advice?
If you’re not open to changing or adapting your idea to fit what your customers will want, your business idea might not be worth pursuing.
“Success happens when you are willing to listen and consider others’ advice,” said Angie Yasulitis, CEO and managing partner at YaZo Marketing and Business Development Strategies. “Most good ideas take some tweaking to get to market. Being closed-minded is a business killer.”
How will you market your business?
Many entrepreneurs think about the problems their business will solve but not about how they intend to market their business to their target customers. Jesse Lipson, corporate vice president and general manager at cloud company Citrix Cloud Services, said that your marketing strategy can determine if your business idea is a good one.
“If you have a solid go-to market strategy and a decent product, you’ll probably be successful,” Lipson said. “But if you have a great product without any idea how to reach your potential customers, then it’s going to be really tough to make it successful. Thinking through that as early as possible is really key.”
Are you being realistic about your goals?
As excited as you may be about a new business idea, it’s important to stay grounded and be realistic about it. Thomas J. Gravina — chairman, co-founder and CEO of cloud services company Evolve IP — said you shouldn’t have a “Field of Dreams” mentality when starting your business.
“Just because you have a vision and decide to build it does not mean the rest will follow,” Gravina said. “While you may have an idea that is original, revolutionary or ahead of its time, there should be a real, solid market opportunity to ensure it is successful. Any new business case or new endeavor has to have a viable market that you believe you can sell now — not theoretically or on the premise that there is a future for this market.”
Can you explain your idea in the simplest terms?
Your business may solve a complicated problem, but you should be able to explain it in simple terms so that anyone can understand it, said Kris Duggan, CEO of goal management company BetterWorks. Duggan suggested using what he calls “the grandma test.”
“When you typically hear someone pitch their idea, it’s usually chock-full of important-sounding jargon that rarely makes sense,” Duggan said. “When you think about your new business idea, ask yourself, ‘Can it pass the grandma test?’ In other words, would your grandma understand what you do? Perhaps your business is solving a complicated problem, but early on, come up with a way to explain it that makes sense to the masses.”
