When in the early stages of business startup, one of the most important things to have perfected is your business idea. Before you can really progress with securing finance or finalising your business proposition, you need to make sure that your business idea is viable – that is, making sure that it will actually be profitable.
But, how do you go about doing this? Where do you even start?
Well, there probably is not one definitive answer to this, as there’s so much room for variation between different business ideas. However, there are still a few things that you can consider when first starting up, in order to try and ensure your business ideas is as viable as possible.
First, it may help to consider the factors that actually define a successful business.
Of course, you want your business to be profitable. In order to stay in business, you’ll have to make money. One good way of judging whether your business will be profitable or not is to question whether or not it fills a gap in the market. For instance, if your idea is the answer to a previously unsolved problem in life, then there’s a good chance that consumers will be interested in it. If, however, your idea is too similar to already existing businesses for example, you may find it hard to break through to the market – in which case you could say that your business idea would not be very profitable.
An innovative business idea has a high chance of success, as it’s likely to be something consumers have never seen before. A brand new idea is also likely to generate interest in the relevant industries, meaning that there could also free promotional and advertising opportunity for your business – for instance through news and PR – further increasing your reach.
A competitive edge
It’s always good to have something that your direct competitors don’t, and if you can achieve this from the very beginning with your business idea, your chances of success will increase. It may be the case that there may already exist businesses similar to your idea, but as long as you have some differentiating factor, then that should give you a competitive advantage.
Your business idea needs to have an element of adaptability. For instance, this could be the scope to expand on your original idea for growth in the future. It’s also important that you consider how well your business idea will fare in a different economic climate. For example, if you are planning on marketing a luxury product, are consumers likely to drop it in the future if they find themselves with less disposable income?
After you’ve got a better understanding of what defines a business’s success, it’s time to apply this knowledge to your own business idea, so that you can assess its viability.
Are you solving a problem?
As mentioned before, business ideas that exist as solutions to everyday problems are typically likely to be more successful that those that, for example, exist only as luxuries or non-essential goods and services. If your business idea serves as a solution to one of life’s inconveniences, then it already has value to a customer, and it will be less difficult for you to prove to your target market that they truly need your business.
This is not to say that every single successful business idea will follow this format – there is just a better chance of you experiencing success if your business idea solves a problem.
This may sound simple, and it may even sound stupid, but Googling your business idea can help you to gain an understanding of who your potential market may be, as well as any competitors currently occupying market space. It’s important that your business idea finds the right balance between customers and competition – as you do not want to enter an over-saturated market with a high volume of competitors and few potential customers.
If, through Googling your business idea, you find that there are already a wide variety of similar existing companies, then you will need carefully consider how you will find a competitive edge. On the other hand, if you find there are no other businesses like yours, then you may want to do some further research into why there aren’t any, and also try to validate the need among consumers for a business like yours.
Carry out market research
One of the best ways to find out whether consumers are likely to become customers of your business, is to simply ask them.
More often than not, carrying out market research can give you a really clear idea of whether your business idea is going to work or not. Once you’ve identified who the target market for your business is going to be, you can ask them a series of questions to determine their interest in the idea, as well as get feedback for improvement. There are a number of ways in which you can conduct market research, for example assembling a focus group, or running a survey online.
Feedback on samples
If you have a little bit of budget to dedicate towards validating your business idea, then there is always the option to physically trial it. If your idea involves selling products, then you may want to consider creating a small number of samples to give away for feedback.
Giving away free samples of your product to your target audience, or to experts in the industry, is probably one of the most accurate ways that you will be able to gain insight into the value of your business idea, as consumers will have a physical product to try and feedback on, rather than just a concept. This is also a good in way in generating a bit of interest in your business before you officially launch.
So overall, although it’s difficult to truly know how successful a business is going to be before actually launching it, there are still a few things you can do to help you to make an educated guess. Ensuring that your business idea is profitable, innovative, competitive and adaptable can help to maximise the chance of future success. Questioning how well your business will fit into your target market, and also asking for direct feedback on any products you plan to produce can give you a well-informed idea of whether or not you should pursue this start up idea, or perhaps head back to the drawing board.
James is an online content creator at Make It Cheaper. Having previously created a variety of content for a number of websites and media outlets, James focuses on making it easy for SME owners to find interesting and engaging content - as well as useful guides and online tools.You can email James at email@example.com
We've received your request and one of our saving experts will be in touch within the next five minutes.
We're happy to confirm we've received your request for a call. Our phone lines are open from 9am - 5.30pm, Monday - Friday, so we'll be in touch at the next possible opportunity.
Whether you're looking to have a chat about your energy, insurance, telecoms or merchant services, having some useful information to hand when we call can help to speed up the process of comparing prices and switching. This could be something like a recent bill or policy document.
Speak soon - we're looking forward to it!