Having too many ideas may be the norm for the majority of entrepreneurs, but it can also be overwhelming and lead to the inability to move forward. Too many choices can actually derail our success and leave us no further along with our business plans than before. Or worse, we realize that we spent all of our money and connections on one plan with no safety net to pursue our next big business idea.
Ideas are just that--ideas. You may have some good ones, but that doesn't necessarily translate into thriving businesses in the making. Not sure where to start? Here's a 11-point checklist to help you decide if your startup ideas are actually worth pursuing.
1. Identify the Problem You're Solving
A startup needs to solve a problem to entice people to actually buy what you're selling. You won't have a viable business until you can clearly identify, explain, and conceptualize the actual problem you're solving.
2. Make a List of Benefits You're Providing
Investors and customers alike need to understand the benefits of your product or service before actually buying it. List as many as you can to attract your target audience, and remember that benefits sell.
3. Get Potential Customers On Board Early
One of the quickest ways to validate your startup idea is to talk to your target customers as early as possible. Reach out to existing clients, attend networking events, go to trade shows, and show up anywhere your clients are likely to hang out. Once you've gotten their feedback, determine if you can mock up a prototype or blueprint to get pre-orders and start getting cash flowing into your new company.
4. Find Out How Much They'll Pay For It
There's not much point in setting a price for your product or service until you find out how much your customers will pay for it. Getting pre-orders is a good place to start. But you can also do some market research to see what your competition is charging and how you can make the product better to earn more and grow a larger audience based on quality.
5. Scope Out Your Competition
Scoping out your competition is an effective way to figure out how big your market is and what's working. If there's zero competition, it's unlikely there's even a need for your product or service. A handful of competitors could be a healthy sign, but may also indicate a small marketplace without much room to scale your business. As you collect research on your competition, take a look at how long they've been in business, who their clients are, how they attract customers, and what they're doing right.
6. Determine Your Passion
Are you passionate about ideas, or about actually running your startup? Daydreaming about your amazing idea and how it could impact your life is a lot different than doing the hard work to get your business up and running. Make sure you have an actual passion for your startup and operating a business before diving in.
7. Understand Your Talents and Limitations
Very few people will become the next Steve Jobs or Bill Gates, regardless of their ambition or talent. And even if you did find a viable business idea that could scale to the size of Apple or Microsoft, you would need an unbelievable amount of persistence, motivation, and willingness to do the hard work involved. So instead of living in denial about your talents, take inventory of what you're truly good at, as well as where your limitations lie.
8. Find a Mentor
Solicit the advice of a mentor who has worked in your field and knows the unique landscape of launching a startup. A mentor should have enough industry experience to understand the market, walk you through what's involved, and give you some detailed feedback. This step alone could tell you everything you need to know about whether or not your startup idea is worth pursuing.
9. Nail Your Production Estimates
It's important to know much your startup will actually cost, starting with your production estimates. Can you produce the product, like software, yourself? Or will you rely on vendors to do it for you? If you need outside help to get your idea produced, then you need to nail down your costs to figure out your funding needs and how much of a profit you'll need to turn.
10. Assess Your Funding Needs
Once you've done a little crowdfunding market research and determined your production costs, it's time to assess your funding needs. How much will you need and what type of plan will you approach investors with? How soon will you need the cash and how will you keep your company running?
11. Determine Your Break-Even Point
Launching a startup and seeing success is an exhilarating process, but can still take you underwater unless you know your break-even point. How long will you need to work on selling your product or service before you hit that point where you're no longer in the red? It could take years to turn a profit. Will you still be passionate about your startup, or ready to move on and start working through this checklist again with a new idea?
What's on your checklist to help you decide if your startup idea is actually worth pursuing? Let me know by leaving a comment below.