How Do I Know If My Business Idea Is Any Good?

How Do I Know If My Business Idea Is Any Good?

How do I know if my business idea is good? Before you delve into the questions, answers, and planning required of a business plan, it is important to solidify your business idea.  The best way to do that is to create a “concept of business” statement.  A one-page document that defines the great idea that you’re turning into a business. This document is the foundation that your professionally written business plan will lean on to define your strategy and prove to your stakeholders, including staff, investors, and strategic partners, that your business idea is viable.

This informal but important statement should include some, if not all, of the following statement and concepts.

The market niche. What is the void in the marketplace that your business is going to fill? There’s something you believe the market needs. And you’re sure it is missing. There is an opportunity for a new idea.

How your business idea is going to solve a marketplace problem and why you are the person to make it happen. In other words, the solution to the market need.

How you are going to make money. Are you going to charge your customers a subscription or membership fee? Will you charge a set fee for a given service or charge by the hour? Will you sell a product? Will you sell ongoing or maintenance contracts, or both? Or will your business make a profit using a combination of these techniques?

Explain what’s new about your idea. Which unique attributes will your business bring to the industry, customer service, technology, a special process, better taste, lower price, faster delivery, or a combination of things? Even something as simple as more convenient packaging can make the difference.

Don’t forget about the competition. Keep in mind how big your competitors are in terms of annual revenue. This can help you predict market size and market potential. Are there many or few companies competing for the same customers? Even though the number of competitors may be large, coming onto the scene as one more of many similar products often can be easier than trying to break into a market dominated by giants.