How to check if your business idea is really that good?

Most people who are reading this already have a great business idea and now they want to start a company and enforce their idea.

Everyone has “brilliant” business ideas. To keep business ideas in check, in all big companies there is some sort of idea screening process. Most of the time the problem with ideas is that the ideas are brilliant but not very feasible in the real world.

The first way to screen your ideas is to answer the following questions. These questions are designed to give you a better understanding of your own idea. If you find that you cannot answer these questions, you might need to research about your idea some more.

  • Is there a genuine need for your product/service?
  • Is the need substantial enough to support a profitable business?
  • Do competitors currently offer similar products/services? If “yes”, do your ideas offer distinctive advantages and customer benefits that competitors don’t?
  • Is the product/service feasible to produce?
  • Is the product/service legal?
  • Is it safe?
  • If the product/service is a durable good, can it be easily serviced? (Who will service it?)
  • Are the investment costs required to develop, produce, and market the product reasonably, within your financial realities?
  • Is the “pay-back period” fast enough to allow you to stay in business?
  • Can the product be expanded into a line of similar or compatible items later, if the original product was successful?
  • Can you protect the product with a patent or copyright?
  • Does the product infringe upon anyone else’s patents or copyrights?
  • Are all the needed raw materials and supplies readily available?

In many cases, once you answer these questions you realize that your idea is not that great. You might have to brainstorm and come up with another idea. But, sometimes, what happens is that people are so convinced about their idea they disregard all the information that clearly points out that their idea is not profitable. This always results in failure. What ever you do, make sure you do not fall for this mistake!

If your idea has passed the initial questionnaire you should screen your idea further. To further screen your idea, do the following:

Conduct “Experience Surveys”

What we mean by “Experience Surveys” is that you will have to find and then ask professionals about your idea. Query the following people to get a better idea about your idea:

Engineers: Ask them whether the product/service can be designed and built in a feasible way? What will go into the designing and building of the product?

Suppliers: Ask the suppliers whether the raw materials or whatever may be required to make the product/service available at a reasonable rate?

Middlemen: Ask the middlemen whether there is a market for your product/service? Would the middlemen be interested in carrying your product/service?

Government officials/lawyers: Ask them whether there is any licensing, safety or environmental requirements of which you should be aware. Will warning labels or disclaimers be required?

However “original” you think your idea is, there is a good possibility that someone out there has already done it. Make sure to use the Internet to look up your competitors product. Learn as much as you can about your competitors product.

Read up all the news items about your competitors and their product. Read up about their pricing, profits, distribution, marketing etc.

At the end of all this, you will have a pretty good idea about your product/service. You your self will know whether it is a profitable idea or not.

Be sure to let the idea go if it not a profitable one. As I said earlier, many people can’t let go of their idea even though they “know” it will not work. This always leads to failure. Do not do this.

If you realize that your idea is not that great let it go. Brainstorm and find a new idea. But for now, let us assume that you have found a good idea! The next step is to make a business plan.....

Next - How to make a perfect business plan? & Why? >>

<< Previous - How to start a company? - Introduction

Other articles YOU may like...
How to start a company?
How to make money in the stock market?
How to manage your money?
How to manage time?
How to speak English fluently?

Table Of Contents

  1. How to start a company? – Introduction
  2. Is your new business idea “really” that brilliant?
  3. How to make a “perfect” business plan? & Why make one?
  4. Business plan - Step 1 – Understanding your business!
  5.             Step 2 – What do “you” want? (Personal objectives)
  6.             Step 3 – How to form business objectives? & Why?
  7.             Step 4 – How to make the “right” business decisions?
  8.                      - Making the right legal decisions
  9.                      - Making the right production decisions
  10.                      - Making the right hiring decisions
  11.                      - Making the right inventory decisions
  12.                      - Making the right marketing decisions
  13.             Step 5 – Estimating the capital required
  14.             Step 6 – How to “draft” the perfect business plan?
  15. How to raise the capital required for your business?