Stage 1: Does your business idea suck or fly ?
You have this wonderful idea for a new business. Whether it is making, promoting or distributing this fantastic and new product or service the same 3 ground rules always apply.
- YOU think your idea is the answer to other people’s needs BUT does your chosen market agree ?
- WHO else is offering a solution to this notional need ?
- HOW does your idea differ or add value to the existing solutions
There is no benefit to you in making a product or designing a service that other people do not value
There are thousands of new patents issued every year for tremendous products that satisfy a problem identified solely by the inventor. The vast majority have no commercial future because the market place doesn’t experience or value the problem as greatly as the inventor. There are far too many people who loose substantial amounts of money pursuing dreams that have no commercial worth. The most important step every business must take before investing in detailed research and development is to find out what the proposed market thinks of your idea and what else is on offer
Market Research
Draw a rough sketch of your new product, or a simple schematic of your service. Then make direct contact with several professionals in your chosen market place as well as and ask them what they think of your idea. You can protect your ideas through Copyright protection where appropriate. Or in seeking professional advice most businesses will be happy to sign a simple non-disclosure agreement. Your business idea should be summarized in a single paragraph at this stage
Specifically you need to ask them;
- Do they acknowledge or recognize the problem/need you have identified ?
- Do they know of any other businesses offering a solution to this need,
- who are they,
- where are they,
- how much does it cost etc.
- What do they make of your proposal ? And how can you improve on your concept
Be prepared for people to dismiss your idea. This will happen when you eventually come to sell the idea anyway, so get used to rejection. Write down or record ALL the answers to your questions
Do not simply ask friends and relatives what they think of your proposal. These people will most often WANT you to succeed. But YOU NEED appropriate and dispassionate insight into your proposed market
List all your answers, write them down and review them ALL, including the negative responses.
- If the overall answers are ambiguous, ask more specific questions.
- If the bulk of the answers are negative – abandon your idea now.
- If the bulk of the answers are positive – proceed to the next stage
Negative answers are your wake up call. They can avoid years of frustration, the cost of lost homes and broken relationships. Another idea will come along. This is not about being defeatist, it is being realistic and pragmatic. You learn and live to invest in another dream, another day
Positive answers from potential customers should be kept secure. These will most often be your first customers once you get to market.