Helping business owners with mental health issues, Start Small but Dream Big
8 steps to choosing your ultimate business idea
Some people have one business idea that they are ready to run with. Other people may have many ideas, especially if you followed my ten tips for finding a business idea. When it comes to deciding which is your ultimate business idea, you need to be practical and ruthless. Before committing, you need to be sure that your idea is viable, and there is the potential to make a living from it.
If you haven’t yet decided which is your ultimate business idea, here are eight simple tips to follow. These will help you identify which idea will set you on the path to success.
1. Is it something that you really want to do?
Being self employed is hard work and requires dedication and passion. If your business is something you don’t really want to do, you won’t fully commit, and you could easily come to hate it. This post from B-Plans (which is great site for business owners) could help.
2. Do you have the right skills?
If not, can you undertake further training, or afford to pay someone who does have the right abilities? One example is that you may need professional photographs of your product. Can you learn how to take photos that are of a high enough quality, or will you need to pay someone? Udemy is my favourite site for high-quality, affordable courses online. For those in the UK who prefer attending classes, the National Careers Service has a comprehensive, searchable database of courses across the country.
3. Do you have the time to commit to that particular business?
If you’re opening a shop that requires you to be there from 8am to 6pm Monday to Saturday, and you have children but no childcare, how will you manage that? If evenings are the only time you can work, then there is no point starting a business that needs you to be contactable during office hours.
4. Are you able to finance the setup costs?
Do you have enough money to fund it yourself? Do you need a business loan? Whichever it is, can you afford the equipment you need to start out? What about the marketing you’ll need to promote your business? This handy, downloadable combined checklist/calculator will help you figure out what you’ll need.
5. Is there a demand for that product or service?
Too many people jump into a new venture with both feet before checking whether enough people want to buy. If no-one wants what you’re selling, you won’t be able to make money. Before committing, talk to people in your target market to see what the level of interest is. This post from Entrepreneur.com provides some useful tips for testing the market.
6. How many other people are already offering the service or product that you want to offer?
Is there space for you? If the market is already crowded, can you tweak your idea in some way to make it more unique or specialised? If you want to open a sports shop, perhaps you could you offer a free gait analysis for runners when they buy their training shoes? VerticalResponse.com offers some great suggestions here.
7. Will it be profitable?
If there is something similar on the market, check out what your potential competitors are charging. This article from Inc.com is a useful guide to finding out. Remember that some industries are so competitive or price sensitive that it can be almost impossible to make a profit, unless you are able to massively upscale your business. Office cleaning is one such industry.
8. Will it generate repeat business?
Experts believe that it is between three and five times more expensive to find new customers than to retain those you have. Startups.co.uk has some advice. If your product is a one-off purchase, you will need to factor the cost of finding new customers into your pricing strategy. Think about how will you find new customers, and how easy or difficult it could be.
Once you have worked through these steps, you should have narrowed your ideas down to those that could work for you. You’ll also have some thoughts ready for writing your business plan, which is covered in another article.