How to Refine Your Business Idea
Even a good business idea might not be financially workable. Here's how you can determine if your product or service is a money-making enterprise.
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You know you have a brilliant idea for a business and you are convinced people will buy your product or service. Well, guess what. Even a good business idea might not be financially viable.
It's all a matter of putting aside your ego and being willing to create a business that will not only survive, but thrive. If you have an idea for a new product or service, you can't be afraid to rethink it and refine it, says Jim R. Sapp, national business consultant and author of Starting Your First Business. The more you set out to do before the launch, the less you'll have to do afterwards, adds Sapp. Also, the less costly it will be trying to fix things.
Adrienne Simpson initially intended to run a traditional moving company out of her home in October 2002. The idea came to her after relocating her mother from Georgia to Michigan. "I thought I'd put everything in a box, put it on a truck and send her on her way. Oh, no! Mom started walking me through her home, pointing at things saying, 'I'll take that, let's sell that, and I want to give that away,'" she recalls.
Simpson's first business plan (she's done five revisions in nine years) described the company as a packing service. But she soon realized that when the elderly move they often relocate to a smaller home, an apartment in a retirement community or an assisted living facility. "The process involves many steps and is very fragmented," explains the certified trucker who can handle 18-wheelers.
By the second year of operation, Simpson shifted gears to make her Stone Mountain, Georgia-based company, Smooth Mooove, specialize in transporting seniors—and their beloved pets—and providing such value-add services as packaging, house cleaning, room reassembly, antique appraisals, estate sales, and charity donations. Her crew does everything: put clothes in the closets, hang drapes, make the bed, fill the refrigerator.
But even still business was stalling. "I knew how to run an existing company, but I didn't know how to run a start-up," says Simpson, who worked 20 years for Blue Cross/Blue Shield and 10 years with Cigna Healthcare.
Seeking money and marketing advice, Simpson went to the U.S. Small Business Administration (SBA) office in Atlanta and was connected to SCORE (Service Corps of Retired Executives) counselor Jeff Mesquita.
"When you position your company you have to think outside of the box in terms of what makes you different from the competition," says Mesquita. "Adrienne described that what she does is move seniors from A to Z, so, when they arrive to their new home it is like walking into a hotel room." The only thing her clients have to bring is the clothes on their back (and maybe their pet under their arm). That's when Mesquita suggested the business name change to Smooth Mooove Senior Relocation Services.
That same night, Simpson went to a networking event. When people asked 'what do you do?' and her response was 'I have a senior relocation service.' Right away people said 'Oh, you move seniors." The business took off from there.
It goes without saying that it takes more than having the right business name to run a profitable business. So, how do you guarantee your product or service is a money-maker. Here are five ingredients to help you create a recipe for success.
How To Refine Your Business Idea: Test Your Idea
"The best way to test your idea is if you're employed full-time and can sell your product or service in the marketplace on weekends," says Sapp. If the business is already your day job, then you have to move quickly to test, verify, and tweak your model," he adds.
Try surveys, polls, and focus groups to gain insight into attitudes about your business idea. Solicit feedback on the cheap by using online survey tools available through such services as Zoomerang.com, Surveymonkey.com, and Constantcontact.com.
The goal is to get to know your customers intimately. What turns them on? What causes them to tune out? Are they impulse buyers or do they like to deliberate over their buying decisions? There are a lot of products that people like but don't buy, says Sapp. The price might not be right, for example. Simpson charges $3,000 to move a two-bedroom apartment in Atlanta. That might seem pricey for someone on a fixed-income. Although seniors are Smooth Mooove's end-users, direct clients are their Baby Boomer children.
"Use social media to hone in on certain groups that can become your focus group," says Susan Friedmann, a nichepreneur coach, in Lake Placid, New York and author of Riches in Niches: How to Make it Big in a Small Market. "Check out chat rooms, communities on social networks like Ning or Facebook, industry groups within LinkedIn," she says. "What are people discussing? Letters to the editor or articles in trade publications are resources for finding out about challenges in that particular industry. What are people writing about? What do people want to know about?" Knowing the answers to these types of questions may help you refine your idea.
Dig Deeper: How to Use Online Tools for Customer Surveys
