Here’s an age-old question that most every entrepreneur finds themself faced with: how do you know if your business idea’s a good one? Or, at least, it’s a question that every entrepreneur should find themself faced with. The unfortunate reality seems to be that not enough entrepreneurs go there before starting a business. But seriously, before you go about launching a start-up that sells shoes that convert into flotation devices for waterborne aircraft landings (they could’ve used it in the Hudson!), stop for a minute. Ask yourself this: is my idea any good? And then ask yourself these questions, courtesy Forbes magazine, to really get at the heart of the matter:
-”Do You Have A Compelling Value Proposition?” In other words, what’s awesome enough about your product/service/widget/whatever that you can convince people to actually buy it? Forbes doesn’t mince words: “Just because you think your idea is great doesn’t mean anyone else does.”
-”Is There A Viable Market For Your Product Or Service?” Even if you think that all people who fly on airplanes are potential customers (for those shoes that transform into lifejackets, see above), that’s not so. Only a certain percentage of people would 1) be interested in the product to begin with and 2) would determine that they like it enough that they’re willing to plunk down cold, hard cash for it. Not only that, you need enough of those people to ensure that your business can not only sustain operations, but can theoretically become profitable.
-”Can You Cover Your Development Costs?” This one speaks for itself.
-”Can You Reach Your Target Market In A Cost-Efficient Way?” You may have the greatest idea in the world, but if you’re clueless about how to spread the word (without dropping a ton of cash on television ads), then you’re in trouble.
-”Can You Sustain A Competitive Advantage?” One of the gravest errors many entrepreneurs make is underestimating the competition, and assuming that their product will “just be better.” If you can’t articulate how it will be better, then you should probably start rethinking your idea.
-”Are You Committed” If you’ve gotten far enough along in the process that you’re actually planning on starting the business, chances are you’re in it for the long haul. But on the off chance you think you’re in for limos, Cristal, and private jets within the first few years (and not much hard work): you aren’t.