Is your business idea businessworthy?
You have got an innovative idea. You see lots of potentials in it. Now you want to take it into the next level by introducing a new brand in the market. Congratulations! But before jumping into the enticing world of entrepreneurship, have you thought it through properly? Is your idea really businessworthy?
You most likely do not have any prior experience or exposure about running a business from scratch. Most people do not. Business schools seldom equip their graduates with entrepreneurial skills. Management members of large corporates are not efficient in running cash-constrained and under-resourced new business ventures either.
Do not worry. Running a startup or a small business is not rocket science. If you are thinking about being an entrepreneur with zero entrepreneurial experience, working on the following seven questions should be a good starting point for you:
1. Have you defined your target group properly? Who are you going to serve specifically? You need to narrow it down as precisely as possible (for example, mothers of kindergarten students living in upscale metropolitan districts with a monthly disposable income of $5,000).
2. What specific solution does your idea offer for an existing or latent need of this precise target group? If a solution already exists for them in some way, what differentiates your one from them? You should be crystal clear about your unique selling proposition.
3. Have you validated your idea from the perspectives of your potential customers? There may be a gulf of difference between what you think your customers think and what they actually think. Skipping this crucial step may eventually prove to be fatal for your startup or small business. All of your presumptions should be validated properly before launching the product.
4. Even if your solution is fantastic, are your potential customers willing to pay for it? If the answer is yes, come up with a right pricing model. If the answer is no, you have to re-work through the previous steps to make the answer yes.
5. How scalable is your solution? Sell it too few, you will soon be out of the business. Sell it too high, you will be in need of huge investment. You should know beforehand what is the threshold level, in terms of sales and revenue, that you must reach for survival. While allocating your already scarce resources, priority should be given on the items that will help you achieve scalability.
6. How sustainable is your business model? How long will it take for your cash-flow to be positive? When will you reach your breakeven point? Will you be able to maintain sufficient cash-flow to survive that long? Work on them rigorously before embarking on your new enterprise.
7. How easy is it for your model to be replicated by competitors? The easier it is, the riskier it is for you. Your model should be difficult to replicate at least for first few quarters.
Get these seven points right before embarking on your entrepreneurial journey. Besides an excellent idea, proper planning and its efficient execution are the keys for success. It’s all about dedication, discipline and hard work. Your idea is wonderful. Go to market with it. Wonderfully.
Best of luck!