Selecting a Business Idea to Move Forward With
Time to get started on your Side Hustle!
Hello to my fellow Hustlers!
Today I am working from Irving (more specifically Las Colinas), Texas. For those of you not from Texas, this is where the Cowboy Stadium is located. If you have never been to Jerry-World, I would highly recommend it! The stadium is truly a sight to see. Everything about it is Texas sized. Las Colinas is 15 minutes from Grapevine, where I grew up. I am thrilled to be recruiting for the company I love so much in the only other metropolitan area I love as much as the Puget Sound. Microsoft is recruiting a new class of engineers for our Las Colinas office and I am excited to guide them through their interview/decision process.
Let’s get to The Side Hustle! In this post, we’re going to explore how to choose a business idea from the list you created during your brainstorm. Using my approach, you will select your top three to four ideas to conduct research on. The research should take anywhere from 4–6 hours. Once the initial research checklist is complete I begin work on the product launch. Throughout the launch and first bit in business, you will likely pivot your idea several times. No matter how much research you have done, you might find out that customers do not respond to your offering in the real world or that creating your product en masse is more difficult than you anticipated. At this time, you will adjust your idea to address the issues as they come. You might end up with a totally different idea than the one you started with.
You could spend several months writing a business plan for any idea, no matter how simple it may be. Business plans are very important, but I’d argue that you should write the business plan after you’ve made a few pivots and you believe your business idea will meet success. I think your business plan should have to do more with growth than the initial launch. I’ll be first to say that my personal approach to business planning is controversial. I think many entrepreneurs would say writing a strong business plan before you begin is key. But, I think these entrepreneurs typically work on their business full time, so it is riskier not to nail the idea right out of the gate. Because you are working on a Side Hustle, you have the ability to experiment in order to get idea exactly right before writing a plan focused on growth! Also, a lot of time might be squandered trying to word things correctly in a plan when you could just be doing!
Okay — time to get started on the research checklist!
First, choose the top three to four ideas from your brainstormed list.
Choose ideas that you have a feeling could be successful and that you are passionate about. It is key to be EXCITED about the ideas you choose to look into!
Research potential competitors.
Bing it! Ha ha — this Microsoftie couldn’t help telling you to ‘Bing it’. Are there other companies doing the exact same thing or something similar? How similar is your plan?
-If there’s nothing out there like your idea, AWESOME! This is actually rare.
-If there’s an idea out there akin to yours, that’s okay! After researching the below questions, physically write out how you can differentiate your product/service or provide customers with more value (lower price or higher quality)?
- Record the company names that do something similar for future reference.
- How much do your competitors charge?
- Exactly what products/services are they offering?
- How are they marketing their product?
- How do you think these companies are bringing their product to market? What steps do you think they take to get the product/service in their customers’ hands?
- If there are no other customers doing exactly what you would like to do, proceed with the checklist. Remember, even if a company is doing what you wanted to do, think about how you can change your offerings slightly to make your business unique.
Is your ideal business name available?
I think I will do a post on naming your business in a few weeks. You can search your state’s Business Licensing Service website for trade names that are already registered. The state of Washington’s site looks like this.
Is a website domain available that potential customers can remember?
Type in the name you are thinking into your browser and see what comes up. If you find a cheap domain at this time you might just want to purchase it depending on how your research is going. There are several sites you can purchase your domain from, but I think GoDaddy is probably the best one.
Are there regulations in this industry?
You will want to check into city, state and federal regulations. Start by Binging (#Can’tStopWon’tStop being a Microsoft fan girl) “Regulations on <insert industry here>”. This step will take some digging. You might also need to call each regulating body (city, state and federal) to see if there are any regulations. Regulations can get fairly specific. For example, once I thought about starting a dog daycare (let’s be honest, that is still something I really want to do), and I found out that in King County you need to have 20 feet between a fence where dogs are kept and a public area like a sidewalk or street. In King County, 20 extra feet means lots of extra time spent searching for appropriate locations.
Run the numbers!
My favorite part. #nerdalert. Upon thinking about this more, we will have to do a finance lesson later, but below are the numbers you initially need to analyze for your business. Remember, all of these will be rough numbers and the depth of the exercise will depend on the complexity of the business you would like to start. You could spend a LONG time developing a forecast that could actually be spot on. Only spend a few minutes guesstimating each component. You’ll refine the forecast after you pivot.
-Revenue and Expenses
Revenue
- How much can you sell each unit for?
- How many units will you sell?
- Can you make revenue selling any ancillary products?
Expenses
- How much will each unit cost to make?
- Where do you think you will market your product or service? What is the cost of a website? Online ads? Physical flyers?
- What will shipping costs be?
- Business insurance costs
- Attorney fees (if you need help filing to be a business, writing Terms of Service, etc. )
- Etc. — The expenses list will be unique to your business. Think through the process of potentially taking your product to market and write down what you will believe the costs to be. If you are stuck, you might want to pad your estimate but estimating a
When you subtract expenses from your revenue, are you in the positive? If so, this will be your profit. You will need to decide if this profit margin is worth it for you to continue putting in effort to the project.
Eventually we will perform both break even and return on investment calculations. Stay tuned for a finance lesson(s)!
Do customer research.
Ask your friends and family if your business idea might be appealing to someone. Poll your Facebook/Twitter/Instagram followers about your idea. Truly listen to their thoughts, but do not get discouraged if you do not exactly like what you hear. These people will give you insights into how your customers will view your idea. They might save you from launching a business that could fail. If you listen to their thoughts on how to alter your idea and then pivot your idea to incorporate their feedback, you have a better chance at being successful!
Once you have run through this checklist for each of the three to four ideas, one should be more feasible/attractive than the others. Select one idea and then get going!
I’m doing exactly what I want to be doing! Join me! Reach out via email if you would like to talk through your ideas. I’d love to help you through the process of launching your Side Hustle.
Talk to y’all soon. XO,
Chelsey
