How Good is Your Business Idea?
Time for a true confession: my first business idea flopped. When I began working for myself, I started as a ? Charitable Giving Consultant.? My concept was to assist wealthy individuals and small family foundations with their philanthropic activities. I had the background; I knew people really needed the service, and no one else was doing it. It was a great idea.
Great, but too new. Every time I met with a prospective client, I had to make two sales: first I had to sell them on the concept, then I had to sell them on me. Fortunately, to my surprise, I discovered I enjoyed doing something entirely different. Even before I got my first charitable giving client (and I got a big one), I met someone who needed a business plan written. Though I had little background in business plan development, I took to it immediately and realized I could make a good living.
That? s why I advise people starting a business not to be completely obsessed by devising just the right business idea. It? s likely to change anyway. If you? re trying to figure out what kind of business to start, keep in mind:
- An idea isn? t enough. I? ve met hundreds of would-be entrepreneurs who are afraid to tell anyone their idea because they fear someone will steal it, and even more who are bitter because they think someone ? stole? their idea from them. Ideas aren? t businesses--they? re just ideas. I have ideas for dozens of books every year, but that doesn? t mean I? m going to be able to write them all, or even that all of them deserve to be written. The key is execution.
Businesses take hard work, persistence, cash management, and all the other things that go into the day-to-day running of a business. Solid business operations beat great business ideas every day of the week. Nobody pays the rent just by coming up with ideas.
- You don? t need a new idea to be successful. In fact, most good, profitable businesses are developed from rather mundane ideas. Yes, it may have taken a Levi Strauss to invent blue jeans, but you can have a money-making retail store selling jeans without coming up with anything particularly new or exciting. Most of us don? t want huge multinational businesses, we just want solid, profitable companies.
- A great, new idea can be a handicap. Here? s one of Rhonda? s Rules: ? It? s easier to get a piece of an existing market than to create a new one.? Creating a new market is difficult, time-consuming, and expensive. A lot of Internet companies learned that lesson the hard way when they realized customers weren? t yet ready to buy online.
It? s usually better to be a follower. Remember, the person or company who first invents a new product or service spends a lot of time and money figuring it all out. They work out the kinks, find suppliers, build a market. You can take advantage of their experience--usually quite legally--by coming in after them, especially if you offer improvements. You? ll find it much easier and cheaper to get established if there? s already an ? infrastructure? --such as suppliers, distributors, trade organizations, etc.
- Old ideas work. In fact, some of the best ideas for new businesses are things that have been done before--often for a long, long time. As industries age, big companies come to dominate, and as they do, they often neglect some of their smaller--but still very profitable--customers or market niches. This gives you an opportunity to snap those customers up.
- Of course, a really bad idea is deadly. Who thought up the idea of selling furniture over the Internet? Don? t people want to see and feel the furniture they? re purchasing? No matter how well you run a business, you can? t make money selling something people don? t want to buy. (But, then again, green ketchup is a big hit. Go figure.)
There? s an old saying, ? Success is 90% perspiration, and only 10% inspiration.? I? d say that? s giving inspiration too much credit. By the way, does anyone want to buy a stack of old business cards that say: ? Rhonda Abrams, Charitable Giving Consultant? ?
Copyright © Rhonda Abrams, 2001
Rhonda Abrams writes the nation? s most widely-read small business column. She is the author of The Successful Business Plan: Secrets and Strategies, Wear Clean Underwear, and The Successful Business Organizer. For free business tips from Rhonda, register at www.RhondaOnline.com.