Choosing a business idea is easy; anyone can do it. Selecting the ‘right’ idea is often the tricky part. A business idea is like a shoe. If an entrepreneur with the wrong foot size tries to take it on, it may be a horrible experience. New businesses often fail because the ideas and entrepreneurs behind them are a bad fit. I will provide you with a checklist of five basic rules to test that great business idea you’ve been considering.
1. Does the business idea stir up a passion in you?
Humans are creatures of emotion, more so in the world of business. Our mind is a complex machine that can be brought to fantastic action by strong feelings. Passion is the defining quality of entrepreneurship that breeds positivity, ambition and perseverance – the critical nutrients that will nurture any business idea to become a remarkable success.
Most people start a business and focus too much on the money that can be made. While I insist that focusing on the money isn’t bad, focusing ‘too much’ on it is! Very few businesses start making money almost immediately. Like a baby, a new business needs to be taken care of until it can stand. Depending on the kind of business you are considering, this may take six months to 5 years! Do you have the patience, passion, and belief to wait for your ‘baby’ to mature despite all the challenges you will face? The business world is harsh, which is why almost nine out of every ten new businesses fail in their first year.
For a business that won’t make you any money immediately, you must love and enjoy it enough to stick with it while the road is rough and the money isn’t coming. Will you have enough passion to believe in the business when you run into financial trouble? Will you love it enough not to be bored two years later? Is there some strong connection you have with the idea you find hard to explain?
2. Can you apply your knowledge and natural abilities to the business idea?
The best business ideas can be gained from your knowledge or natural abilities in the area. If you love writing, for example, becoming a blogger or running a content website will be easy. Almost everyone has some special skill or basic knowledge that can be made into a business. If you already have a gardening hobby, turning it into an urban vegetable farming business will not change your love or dedication. Plus, you will be getting paid for it!
At the early stage of your business, you will likely be responsible for many of the ‘technical’ tasks. You may be involved in producing or providing the product. You must also convince people to buy what you are selling and deal with inquiries and complaints. Do you have excellent organization and presentation skills? Are you a good leader? Are you uncomfortable dealing with people? The great thing about this rule is that anyone can learn the skills and acquire the knowledge if they are interested.
Because you are great (or terrible) at these things will not guarantee the success or failure of your business idea. It will be an excellent thing for your business if you are willing to learn and improve your knowledge and abilities. The more the business idea fits your abilities, knowledge and temperament, the better!
3. Does the business idea suit your risk appetite?
Some business ideas are riskier than others. It’s usually safe to bite only as much as you can swallow. How large (or small) is your risk appetite? How much physical and financial resources will you invest in your business idea? Risk is not a bad thing. After all, entrepreneurs are different because they are willing to take risks to achieve a return. So, risk is not the problem.
The problem is knowing how much of it you’re taking on. Most entrepreneurs are often too distracted by the profitability of a business idea and do not take the time to consider the risks involved. There are ways to avoid, transfer or reduce the effects of the risks that will come with your business. This is where a good business plan comes in. A good business plan allows you to analyse all the possible trouble spots and adequately identify the risks in the business idea.
Knowing most risks before you launch the business gives you comfort compared to flying blind and hoping nothing goes wrong. And if, after your analysis, you are convinced the risks are high (or low) enough for your appetite, you may have a winning business idea!
4. Are you in for the long or short term?
Why do you want to start this business? Are you desperate for extra money and need to create a company to supplement your income? Or is the business part of your long-term plan to become financially independent and secure? All businesses are not the same. Some may need long incubation periods before becoming successful, while others are instant successes. An entrepreneur with short-term expectations is bound to be impatient and may not nurture the business well enough to reap the benefits.
Even Facebook had to wait five years before it started making any money. You need to be sure you can wait for the rain to come! Your long- or short-term expectations will indeed affect how you deal with your business. A long-term view will likely lead to a patient and supportive attitude towards the company. While a short-term view would most definitely starve the business of the attention and resources it needs to pull through. A new company that becomes your ATM may not last very long.
5. Are you inspired to take action?
Business ideas will remain ideas until someone takes action. Anyone can have an idea. You can be sure most successful businesses around us today were not started by the person who first got the idea. A business idea is useless inside your head until you bring it to life. Even if it passed the first four tests above, the idea won’t be yours if someone else beats you in it. You have to be inspired enough to start doing something about the idea. And fast! The best business ideas will likely not come to you in a flash. There may be a lot of trial and error involved. If one doesn’t work for you, don’t be discouraged to try another one. Most times, refining the first idea could lead to a different one that would eventually become a real business. Given the rewards of owning your own business, it’s worth all the pain it takes to find a great business idea.
Conclusion
Summing it up, finding the right business idea is like discovering the perfect pair of shoes. It’s not just about money but connecting with something you’re genuinely passionate about – your business’s comfy fit. Consider your risk tolerance, like figuring out your spice level; a good business plan is your recipe for success. Time commitment matters, too – whether it’s a quick snack or a full-course meal.
Here’s the secret sauce: your inspiration to take action. Ideas are like ingredients waiting for a chef. Let your passion guide, your skills flavor, and your commitment be the driving force. It’s not just about profit; it’s about satisfying your entrepreneurial hunger with a dish that fits you just right.