How to Know If You Have A Great Business Idea?

People are becoming smarter these days, finding new solutions to our problems almost daily, but, how certain are you it could be the ‘Next Big’ Thing?

Here are five steps to take before taking the plunge into the entrepreneurial world:

Give Your Idea A Step Back

Take a step back from your idea to allow yourself getting more perspective on it.

You may have found a great idea that solves people’s problems and excited to start working on it. Before you do, I’d suggest you to stop. Give it a few days. Spend the time on what you enjoy doing (e.g. hobby etc) or more research on the industry. Reason for this is it will allow your excitement to calm down letting in your rational thinking into process. By the time you come back to work the idea, you will see in a broader aspect and even spot issues which you did not realize before.

If you are still excited after taking the break, then, you may have found a great business idea. However, if you feel the idea only excites you for some time only and starts getting doubts about it, there’s a chance it might only be a mediocre idea. This does happen to most of the Eureka moments you had (or at least I had) and it is completely normal. But don’t give up on it yet. Despite of what you think about the idea, it is still worth the time and effort to do more research on it before giving up.

So, give it a rest for a few days and see how you’d still feel afterwards. Does the idea still excite you like it used to several days ago? If you do, start thinking about the details, business plan.

Perform Survey/Questionnaire

If you still feel excited about the idea, that’s good. Now, time to work on the details. It’s always helpful to get insight from surrounding people.

Start talking to friends, even better, friends who are involved or interested in the industry you’re pursuing. Get a better picture about the industry. Discuss on issues such as:

  • Do the consumers understand your product and how it solves their problems?
  • Will they purchase for the price range?
  • How the industry can benefit from your business?
  • What are its weaknesses?
  • What threatens the industry?
  • Where the industry will be in the next decade and how it will affect your business?

If you have the know-how skill to devise questionnaires, I’d advise you do so centering on the questions above. Otherwise personal interviews or discussions should get you start somewhere. Try Qualtrics if you’re interested to find out more about creating questionnaires.

For personal interviews or discussions, take notes or record the discussion. The ‘devil’ is in the detail. You don’t want to miss anything!

Pros and Cons List

Getting information is only the first step. Now, you need to extract the key points and start mapping to get the whole picture.

I always find it helpful to come up with the pros and cons list each time before making important decisions. It gives me a much clearer picture of the entire situation.

You are also advised to use SWOT Analysis which provides a more in-depth outlook of the industry. Here’s an example of of the SWOT Analysis I did back when I started my online retail business years back:

Mirsky Mode SWOT Analysis (General View)

swot-analysis-article-1-how-to-know-you-have-great-business-idea

In reality, the list goes on further but I feel this should suffice to give you some idea on working the SWOT Analysis. Besides, a full analysis would require me to write another whole article for it. Something I’m considering to do in the future!  Based on my initial research and discussions with people, I’ve discovered the following as recorded on the SWOT Analysis. Many are convinced that the business Strengths could draw consumers into patroning due to being cheaper than usual market. The discussions also led me to identify more opportunities for the company to venture in the future. Weaknesses and Threats became my focus of attention as my company had restricted financial resources in a fast-paced fashion industry.

Talk to Successful Entrepreneurs

Once you feel you have the right amount of information, time to set up an appointment with business owners – preferably related to your industry. What’s important here is for you to obtain information from someone with maturity in the business world. It’s the ‘been there done that’ experience that matters here.

Yes, information from your friends and extended ones are important too. But these information only tells you a part of the story – the consumer point of view. You need insight on how to operate and achieve your business targets – which only experienced business owners could help with.

It is also a good idea to have some knowledge or input on the topics before meeting with these people since they do not simply have the time to entertain all the questions from ‘A to Z’.

Focus your discussion on the following (depends on your industry):

  • Day-to-day operations (Discuss about financing, workflows, work systems etc)
  • Logistics (Transportation, Supply(s))
  • Marketing Channels and Strategies (Ads, PR, Social Media & Traditional Marketing).
  • Distribution Channels (Depends on the nature of your business)
  • Human Resources (Workforce, Training, Hiring etc)

Again, I’m stressing the importance of paying attention to the details. Take notes and voice record (with permission of course). AND ask all the difficult questions.

Re-draw your List

Yes, time to go back to your pros and cons list (or SWOT Analysis). Update the list based on your discussion with the entrepreneurs. You are excited now as you keep receiving positive feedbacks but don’t get it over your head. Give it some time and come back to it for final revision.

Having done this, you must keep in mind the possibilities of discovering more information through time. But don’t worry. This is expected especially if you’re treading the ‘uncharted waters’.

The best advice anyone could give is ‘to always plan for the worst’ so that you’ll be better prepared. Always Prepare For The Worst.

Final Two Cent…

It’s true aspiring entrepreneurs can get very excited when they get the ‘Eureka’ moment. But please be patient. Take a step back and let reality sink in. Do your research after another research. Give it some time and come back to it again. If you still feel the same excitement, you might have just struck ‘gold’.

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