For some, business ideas jump into their brain with virtually no effort at all. They are overrun daily with new concepts for “great” businesses. The problem is, they are not all great money-making ideas. Whether you have multiple ideas for starting a business daily, or you have had that one breakthrough that you think may really be it, it is wise to have some guidelines for determining if, in fact, your notion is truly the next big thing.
When you think you are on the verge of potentially successfully business concept, here are three things to consider:
Does it Fill a Need?
The first thing to consider is whether or not there is a need for the product or service you are considering. The question is not ‘Does it fill a need for you?’ Rather, it should answer the question ‘Does it fill a big enough need to create a market?’
The best way to determine this is through market research. This can be as simple as asking around or doing a pole among groups you belong to on Facebook, or as complicated as hiring a marketing firm to conduct in depth research and analysis on what sort of potential market exists.
Keep in mind that markets are fickle. It may be that there doesn’t seem to be any interest, but with a little tweaking on the product or service you could be there. Keep at it if this is your only roadblock. For example, there may be plenty of childcare services in the area and you determine through research there really isn’t a need for anymore in the traditional sense. However, you may discover a need for overnight care. Pay attention.
This is key. Once you determine there is a need that your business would serve, it is important to determine the product/service is large enough to warrant the business.
Is it a need only in your community? If so, is the need large enough to keep the business going indefinitely, or is your market going to dry up. Using the example of overnight childcare, are there enough businesses that have parents working overnight? Are those businesses stable, or are there rumors of them closing?
If there is only one business and only a couple of mothers have the issue of needing overnight childcare that may not be enough. If there are several factories in an industrial park, and a pole shows a lot of parents that are in need of overnight care for their children, it may be time to open a 24-hour childcare facility in the park!
What is Your Price Point?
Do you have a realistic price point? Is it possible, based on the cost of the product or service, to offer it at a reasonable price to your market and still make a profit? If you are going to have to charge 80% of what parents are paid in a month for the overnight childcare, they are likely not going to be able to afford to use it despite the need for it.
If you do determine your business idea is a great one, and you decide to move forward, Biz2Credit is here to help you find a great lender to get you started. Our network of lenders offers a variety of small business financing products to fill a broad range of needs. Visit Biz2Credit.com today for more information.