This is a question I get asked a lot, in person, on social media, on this very blog, and also on Quora. As a response to this, I’ve decided to tackle this question head-on and create a simple checklist for you to follow. Go through it, answer it honestly and carefully. At the end you will have the answer to the question, “Is my business idea going to be a success?”
Is your idea simple to explain?
Many ideas often appear great in your mind, but when you come to explain them you don’t find the right words. In very simple terms, you should be able to explain what problem your idea solves and how it solves it and write all this at the back of an envelope. If this is not easy for you to do then you need to rethink the idea. At the very start of your business, you need to have one focus.
If you want to open a brick-and-mortar shop, create an online shop, go on television and promote your products and create franchises, then chances are you’re going to fail. I don’t mean to sound discouraging, however, your mind can only successfully focus on one major goal. At its infancy, your business needs all your attention. If you are creating 2 or more businesses at once, you will not be able to provide that all-important focus.
After reading this first question, how will you answer the question: Is my business idea simple?
What is your tangible proof?
It is normal that you automatically think of an idea as a good idea, but fail to actually prove it. A very common mistake is that you could emulate another business and simply assume that by offering a better or cheaper alternative you will automatically take some customers from the competition.
Keep in mind that these established businesses will do their utmost to remove potential competition. You might even think, the market is worth so many millions of Euros or dollars, if I could only take a piece of a piece of it then my business idea will succeed. This is not tangible proof.
To get tangible proof of your idea you need to do two primary actions. First, you need to carry out market research to see if your idea will be a success. Through market research, you will find out what customers really want. Maybe they are happy buying at a higher price for better quality, rather than buying cheaper products. You will never know for sure until you carry out this research.
Secondly, carry out proof of concept of your product or service. Create a sample of the product or carry out some unpaid work to use as your portfolio. In this way, you will find out if people really like your idea and are willing to pay for it.
Next question: Is my business idea backed by results from my market research and proof of concept exercises?
Do you have the resources to succeed?
No idea can be a success if you do not have the resources needed to execute it correctly. Do you know what resources, financial and otherwise, you will need to turn your idea into reality? To achieve this you must draw up a business plan to help you achieve your goals. By writing a business plan you will be aware of all resources that you require.
It might be that your idea is online and you only need yourself, a laptop, and an Internet connection. By means of the business plan, you might however realise that you need to rent a space, apply for permits, hire an accountant, subcontract some work, etc. Only when you dive into writing the business plan will these necessities arise to the surface.
You might also need to seek funding from third parties. There are many options for funding which I will write about in a future article. Feel free to check out existing posts on crowdfunding, equity investment and starting a business with no money. Whichever option you may choose, you will need to prove that your idea is simple, backed by market data and you have a business plan including execution.
Final question: Do I have or know how to obtain all the necessary resources for my business idea?
If you have answered yes to all 3 questions, then your business idea will most likely be successful. In that case then you are a special entrepreneur who understand the importance of preparation and execution. Well done!