Every business like all invention or innovation begins with a business idea. It starts with a thought in your mind and as you ponder on it, it forms a bigger picture. This process or stage is called the ideation stage.
Reality is that, every idea starts out crude and needs to be refined, hence there is nothing like a perfect idea.
However, having come up with an idea, before proceeding to launch the idea, you really should take time to examine its viability.
Consequently, there are a few boxes the idea must tick to be considered a profitable business idea. And you should take due diligence to test the idea before proceeding with execution.
Is the idea doable?
Does it have a potential for success?
How can the idea be executed profitably?
These are some of the questions you must answer satisfactorily. This process will likely require you talk to a mentor or a business coach. This is necessary for efficiency, especially if you have no training or experience whatsoever when it comes to starting or running a business.
Also, at anytime, do not forget that the goal of subjecting your idea through thorough examination is to be sure your idea has a high potential to mature into a successful venture. Hence, the rigour of the process holds immense promises that outweighs the time and resources invested.
Below are 5 signs to check out for, to test if your business idea is a great idea.
1. Is the market ready for this business idea?
Market readiness has to do with whether there is a demand for that product/service already. This demand is always a function of what the market needs/wants.
Checking for available market is always the first place to start when it comes to proving your business idea.
This is because, in business, supply must always follow demand. You cannot reinvent the wheel or you might be in for a big loss.
My first experience in e-commerce was a very sad one because I lost a lot for not understanding and following market trend.
So here’s what happened; I saw cheap goods online, intrigued by the idea of huge profits I placed orders and shipped the goods from China to Nigeria. All these investment of time and money was done without testing the product and the readiness of the market. The result was that I incurred a huge loss. It’s always so when you fail to ask and answer very vital questions before going into any business.
Such questions would include;
Is there a ready market for the product or service you want to launch?
What does the market want exactly?
Answering these questions will help prevent losses you could have avoided. This leads us to the next question which is an offshoot of question 1.
2. How huge is the market?
Fine, there is demand for the product/service you want to create a business around.
But that’s not all. You must find out the worth of the industry.
How much is the turnover in that industry yearly?
Ensure you examine the rise/decline of the industry’s worth so as to see how the industry has faired in recent years. A rise in the worth of the industry and the speed at which it does may be a sign that it’s a lucrative industry.
3. What gaps are available to fill in the market?
Since the industry is an existing industry, you must realize that the industry most likely has top shots, big players with proven track record, huge customer base, and huge bank accounts to fund production, advertisement, etc.
Hence, it might be impossible to compete at their level, so you want to do a market analysis of their strength, weaknesses, opportunities and threats (this is called SWOT analysis).
Consequently, the result of this exercise will help you discover which areas you can exploit and how to position your brand in the market.
4. Is the business idea sustainable?
Sustainability is a very wide concept but in this context it has to do with the continuity or life span of such a business. Some business are seasonal, i.e. they only thrive for a short period. This is because the problem you are solving is not a recurring problem.
You likely want to do a business that guarantees constant reoccurring profit.
5. Is the business Scalable?
Scalability deals with the potential of the business to grow and increase rapidly. This has to do with leveraging on people, technology and systems to automate your processes, your reach and consequently make more profit.
Summarily, if your business idea answers all these questions satisfactorily, chances are that you have a great brilliant idea. The responsibility on you would then be to come up with a business plan and a fantastic execution strategy.
Need help with testing/proving and executing your business idea?
Do not worry any further. Reach out to us at Optimal-Edge Business Concepts today.
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