Anyone can have an idea. Ideas are cheap and they are plenty.
The challenge is turning that ‘amazing’ idea or invention into a commercially viable business entity.
Many people throw their hearts, souls, energy and wallets into developing their idea. Designing, crafting and forming it. Then thinking about ways how they are going to market their idea to customers using marketing strategies and tactics. They are looking from the inside out.
Yet the key questions many start-ups fail to explore first are:
- Are there customers and markets looking for a solution that your idea can solve?
- Are these potential customers prepared to pay for your solution?
- Is your idea really innovative, new or different? If so how many ‘early adopters’ would be willing to buy it and get on board early versus something they are already familiar with?
- Is there a big enough customer market for your idea on which to build a commercially viable business?
- What competition will you be facing when you enter the market?
- How many businesses are you competing with directly? How big are they?
- Are you entering an overcrowded market with big players who have lots of money to spend on marketing, advertising and sales or is the market a ‘cottage’ industry that has lots of small players, one-man-bands, etc.?
These questions and other questions need to be answered before anyone officially starts any business.
If you cannot find markets of sufficient size (yet) and you don’t have something that meets clients’ current or emerging needs and priorities then don’t start.
As I’ve said to many people before, if your business idea is not commercially viable then it’s a hobby.
A word of caution: don’t get confused or distracted by programmes or books telling you that having an idea and will to make it work is all it takes. It isn’t, and the questions offered here are a starting point.
However, if your business idea has the potential to be commercially viable then watch out for the second main reason start-ups fail:
The quality of their management team and poor sales execution.
Another topic for another time.
So before you invest all that time, money and effort, I suggest you do your homework first and check there is a viable market wanting what you have to offer and are willing to pay for it and you have a distinct competitive advantage.
Remember everybody lives by selling something.
Related topics
It all starts with Opportunity
Someone has to sell or you don’t have a business
The rise of Ethical Selling
Your roster of questions can be reduced to this:
Are there enough would-be customers who will pay to buy from me what I have to offer at prices that I can break-even?
Or even better:
Can I lead enough would-be customers to buy from me who will pay what I have to offer at prices that I can break-even?
Without the action of selling, nothing else matters.
Most fail because most have been trained to be spenders. They are skilled to buy merchandise, furnishings and supplies to play business. So they are good at incurring costs.
Some can manufacture efficiently with respect to materials or to time, but making a stockpile of things that one hopes to sell is useless.
The one skill needed that almost none have is the skill of profitable commercial persuasion.
Anyone can give away stuff. That is not selling. By extension, selling at prices below break-even is giving away stuff.
Oh and “sales execution” is college prof talk. Selling is real business.