From millennials to small investors, all sorts of people are looking for new business ideas, but not all of them end up founding successful businesses. Startup ideas trend so enormously in social networks and business circles that it’s often impossible for entrepreneurs to resist the urge to start a new venture. But how do you know which business idea will actually work?
According to successful entrepreneur Manish Bhalla, founder and CEO of web solutions firm FATbit Technologies, identifying the potential of a business demands serious consideration. The next time you have an awesome business idea, follow these five validation rules before you spend too much time on it.
1. Step into the right zone
Save yourself from investing in wrong area. To avoid goof up, pick a business idea based on your personal strengths and areas of interest. Developing a business that depends on skills will save you from problems that invariably surface when someone ventures a completely unknown business model. You can also brainstorm, take surveys, or talk to friends for help in this regard. Also ask yourself, how long you will be able to survive without making a profit? What’s your goal/vision as an entrepreneur?
2. Know your competition
Studying your industry is important to analyze what can make your product or service unique in its market. It is critical for startups to know competition first. Knowing who the competitors are and what their market share is should be on the top of your list. Take both current and potential competitors into account. Evaluate their marketing campaigns, online reputation, and price and quality of products and services. This will help you discover unserved needs and provide insights for your new business to please your target audience by fulfilling them.
3. Learn about your chosen business model
Choosing a suitable business model will pave the way for your success as an entrepreneur. Whether you go for an affiliate business, B2B, or e-commerce store, each will have its own target customers, value configurations, and core capabilities. Your capacity to meet the discrete requirements of a business will define its success rate. Bricks & clicks, direct sales, freemium, reseller, and so forth are a few of the most commonly chosen business models these days. Do not jump over any of these options without pre-analysis. Collect more information about revenue models, cost structures, and value propositions before you opt for a specific business model.
4. Check sustainability
The sustainability of a business idea depends on many factors, including its demand and supply. If your product/service acts as a never-heard solution, or offers something better than existing solutions, it will certainly go a long way. Test the water before you take your first big step in the business world to prevent future failure. Check how scalable your product/service is and determine if people would pay for it. All these factors will collectively determine whether or not a business idea can yield expected returns.
5. Associate with a marketing professional
It’s better to take the advice of a marketing professional right from beginning. Doing this will reduce your business risk as well as overhead expenses, while providing you with details about how much your business demands in terms of promotion and advertising. New businesses that ignore the value of marketing and think this is something that can be worked out later are usually seen rectifying errors committed at the outset. For example, opting for an online business requires a website that can meet usability standards aptly and offer the best customer experience. A digital marketing specialist will tell you in advance that your website needs to be SEO friendly, and the right ways to build it. Developing a platform accordingly will minimize half of the difficulties that can surface later and prove troublesome.