It’s not uncommon (at least with the people I’ve hung out with) to start a night out having a beer and catching up on the week but END the night with about 20 “good” business ideas in your back pocket.
We’ve all got ideas. So, how do you know if it’s something worth starting? You just need to ask yourself these 3 simple questions.
1. Does this idea fit into your personal lifestyle choices, priorities and goals?
This is always a tough one, so a good place to start. We all like to think that our “future selves” are some kind of perfect human with the ability to live out our ideals – you know, getting up every day at 5 am to go for a 5 mile run, drink only green juice for a week straight, meditate for 30 minutes, accomplish all of our goals, use your cell phone less, and get to bed by 9pm… right?
But, if you’re basing your business idea off of some Ideal Future Self, you might have a problem. What’s more likely, is that your current habits and rituals will continue right on into the near future, so make sure your business fits in with your current self instead. If your business idea will cause a drastic change of habits… like, waking up very early instead of your current night owl habits… or interacting with a lot of people when you’re actually a homebody introvert… then you might want to reconsider.
An alternative might be finding business partners or hiring help in the areas where you know it’s not a good personal fit. Which requires money…so on to the next question.
2. Do you have the financing to make this happen or the ability to get a loan, investment or some other type of funding?
Every. Business. Costs. Money.
Even if you think it won’t. In fact, it might cost you 2 or 3 times the amount you assume in a business plan. Make sure you’ve got your finances covered, both personally (so you can continue to live) and professionally (so your business can get past the start-up phase).
There are many options for funding including self-financing, working your idea as a “side-hustle” until you’re turning a profit, crowdfunding (though this will cost you your “social capital” so beware), business loans and investment.
Bottom line, if you’re in business you’ve got to be aware of your bottom line.
3. Is the market willing and ready for your product or service?
This one can be difficult to answer for a few reasons. Most of us are fairly self-involved – meaning, if we think we’d buy this product/service then surely others would too, right?! Sure there probably are others… but how many? Enough to hit your financial and personal goals?
For another thing, throwing the idea around to family and friends might yield results that aren’t very accurate to the truth. They might either look at you like you’re crazy (and the idea is actually still really great, but they’re not ready for it) OR they’ll tell you it’s amazing (and what they mean is that they just love you and want you to be happy and/or they just like being a part of the drama of it all and won’t ever actually pay you a single dollar for that thing you’re trying to sell).
So, how do we figure this out? Look for markets where you have a reasonable amount of competition. Where there are people already paying for a similar product or service that you can now improve upon in some way.
And if you’re doing market research, ask tough questions. If you see a true hole in the market, ask yourself and your potential buyers how they’ve dealt without your product and service until now.
Finally, if you’ve answered these questions and you’re still not sure, consider speaking with a business coach or trusted business mentor. There are private coaches (*ahem* me) as well as coaches you can find through the Small Business Development Centers located through the country.
Starting a business is part dream and part harsh reality. Finding that perfect balance that both excites you AND makes you money for the long run is the key.
Britta Jackson is a serial entrepreneur, co-owner of alder|creative, providing consulting and graphic design to small businesses and non-profits in Grays Harbor (and beyond) since 2013, and the Marketing Manager for the Thurston Economic Development Council. She works from her home in Aberdeen with her husband and 1 year old daughter and enjoys live music, reading business books, and vacationing in small towns.