You’ve got a great business idea. At least, you think it’s great. Here are the questions you need to ask, to find out if your idea will fly.
Is your new business idea your passport to fame and fortune? Or, is it best consigned to the scrapheap? The only way to find out is to test it on a small scale. The saying is ‘fail fast’, but it also means ‘test cheap’! Test your idea as quickly as you can, with as small an outlay as you can. If it turns out your idea isn’t as good as you think it is, you haven’t wasted too much time and money. Here’s how you test your idea, and the questions you need to ask yourself when evaluating whether you’re on to a winner.
What problem are you solving?
The key to startup success is the ability to solve an existing problem. Look at the startups that have achieved massive levels of success, they noticed a problem and found a way to solve it. The founders of Google realised that finding information on the internet was difficult. They created a search engine that found the most relevant page for whatever you typed in. When Travis Kalanick realised that finding taxis was time-consuming, expensive and stuck in the past, Uber was born.
What is the problem that your idea solves? Is anyone else trying to solve that problem? What makes your idea an improvement? Answer these questions and you’ll soon see if there’s a gap in the market that you can fill.
What do your potential customers think?
Don’t rely on your own judgement on whether there’s a gap in the market for you. Get a second opinion by asking the people who you want to use your product or service. Find consumers who are active in the market you want to disrupt, and ask them to help you.
What problems are they having with the current solution? Would your idea help them? Would they want to use it? What is the value they would place on your solution?
Many good ideas fail because consumers are set in their ways and are unwilling to change their behaviour even when there’s a better way out there. Sometimes, business ideas are too far ahead of their time. Make sure your idea doesn’t suffer that fate.
Is your market big enough?
Even if you have a great idea that solves a problem, for your business to be viable, you need to serve a large enough number of customers.
This is especially important if you are going to be looking for venture capital funding at any point. According to Chris Corbishley, an investor a Forward Partners, VCs refuse 29% of investment opportunities because the market was not big enough to offer scale.
Further to this, what percentage of the available market would you need to bring on board to break even? Is there potential to expand your business globally? These are all factors you need to consider.
Can you make money?
You must also consider whether your idea’s business model is viable. Can you make a profit? If you can’t make a profit straight away, when?
You need to test how you are going to charge for your product or service. Are you selling a one-off product, or will you charge a subscription for a service?
Think about the other financial aspects of your idea. How many users do you need to bring in to break even? How many people will you need to hire to bring your plan to life? How much will you pay them and where will you find them?
When you consider these factors, you’ll soon find out if your idea is feasible as a business. Perhaps it’s better left as a hobby.
Are you able to execute?
Once you’ve worked out whether you have a great idea that will improve the lives of enough people to sustain a business, you need to ask one final question. Are you able to execute on your idea? Are you the right person, in the right situation, to make your idea a reality? This is when you really need to be honest with yourself, as a rash decision could see you wasting a lot of time and money.
Money-wise, will you need investment to get your idea off the ground? If so, do you have access to finance? How will you convince investors to believe in you?
What are your skills? Do you have technical expertise? Sales and marketing knowledge? Do you have a team around you who are available, and experienced enough to at least bring an MVP to market? (Minimum Viable Product). If you’re non technical, it’s worth using a service that takes care of the tech for you. For example, if you’re building an Upwork-style freelance marketplace, check out Whitelance.
Finally, are you ready for the pressure of running a startup? Are you prepared for the long hours? The loneliness? The livelihoods of your employees resting on your shoulders? It’s not for everybody. Before you start, you need to realise what you’re letting yourself in for.
Make that leap!
If you’ve answered all these questions positively, it’s time to get going. The best time to start something is straight away. Nothing is stopping you. Build your MVP, then get out there and find some customers!
Roll your idea out to your local area, or a beta group of potential customers that you already know. Listen to what your customers tell you. Iron out problems as you find them.
If you need freelancers to help you bring your fantastic business idea to life, in web design, content creation, graphic design and more, it’s time to talk to Crowdskills. We’re the local freelance provider that can power your startup.