9 Essential Questions to Choose a Business Idea with Big Potential (and Great Personal Fit)
You’ve heard it before. Ideas are a dime a dozen. Execution is what matters.
That’s mostly true, but all else being equal (i.e., if your execution is the same), which idea you choose actually matters a great deal.
Over at The Sparkline, we just heard from James Davis, who started two businesses at the same time. One business (about running a summer camp) earned $20k, while another (about fantasy sports) is at a $250k annual run rate. And the kicker is, he spent more energy on the summer camp business. Read more: How Two Fantasy Sports Fans with No Technical Skills Built a $250,000 Per Year Business »
Ideas aren’t worthless, they’re a multiplier of execution.
In the article, James mentions a framework he used for evaluating the fantasy sports business idea. It turns out the framework was courtesy of Yours Truly, from an episode of the Fizzle Show, way, way back.
You can listen to the full episode here (or in iTunes):
Here are 9 essential questions to ask when evaluating a business idea, to find something with both potential and great personal fit:
- Demand — is it something people want?
- Competition — who else is doing it? Are they successful?
- Care — how much personal interest do you have in this topic?
- Expertise — how much do you know about this topic?
- Specificity — how broad or narrow will your lens on this topic be?
- Differentiation — how will you differentiate yourself from others in this market?
- Likability of Customers — do you like them now? Will you like them later?
- Can/Will They Pay — do they have money and will they pay you to solve this problem you’re helping them with?
- Lifestyle — if this became successful, what would your life look like? Would this be a 200 person company? A single laptop on a beach? Does that fit with your personal goals?
James and his business partner used this framework, and concluded they should give the fantasy sports business a shot. Now they have 1,500 customers paying $15 a month and are growing nicely.
Frameworks like this one are so important. They help you avoid one of the biggest mistakes of all: passing on a great idea because you overlooked something, or because you weren’t in the right mood the day you thought about it.
There aren’t perfect answers to many of these questions, but you could easily turn this into a decision matrix for comparing ideas.
Corbett Barr is CoFounder of Fizzle, a training library and community for independent entrepreneurs. To get weekly resources and strategies to help you build an independent small business you love, sign up for Corbett’s Lifestyle Business Weekly email newsletter.