When Internet businesses took off, it seemed like everyone decided to become an entrepreneur at once. As a result, many areas got quickly saturated and good business ideas became fewer and farther between. You may have noticed that on Shark Tank the Sharks will often pass on a deal if the product is too similar to something already out there. Why? You don’t necessarily have to offer a brand-new, totally unique product unlike anything anyone has ever seen before, but you do have to offer a fresh spin on it. Otherwise, the already established competition will have the market.
So, I want to offer you four ways that you can ensure your business idea is solid. Before you make any big leaps of faith, it would be a good idea to make sure you have a truly viable concept that will give you the opportunity for success.
WILL PEOPLE BUY THE PRODUCT?
Remember that no matter how good the idea sounds, if people won’t buy it, then it isn’t viable. No business can succeed without customers. So, it is time to do some research and find out if your product or service is something people will pay the amount of money you need to make.
You could ask friends and family or do some research into similar products to see how well they have fared.
IS THERE A NEED AND CAN YOUR IDEA SOLVE IT?
A successful business fulfills some type of need for people. Sometimes businesses actually create that need first, but then they resolve it, and your idea has to offer the same thing. Completely frivolous ideas that don’t fulfill any need just aren’t going to be viable.
So before you make any decisions, take a look at need. Really evaluate this and determine if your product or service will actually accomplish anything.
WILL YOUR PRICE POINT ACTUALLY WORK?
Remember that you have a great deal of competition out there these days. Thanks to the Internet, customers can buy from virtually anywhere in the world, and that means if they can find a lower price, they will likely go with that.
Before you run with a business idea, you have to look at pricing in detail, and this is more in-depth than you may realize. You can’t just assign a price with no good reason. Several things to keep in mind about setting price include:
- How much it costs to manufacture, acquire, or make the product.
- Your overhead, including all of your business expenses.
- The amount you need to pay yourself.
- The amount you need to pay your employees.
- The cost for replacing inventory.
- The cost to grow your business.
All of these expenses have to be taken into consideration when setting the price for your products. Once you determine how much you will need to sell the product for, then you have to decide if people will be willing to pay this price for your product. Research your competition. If you can’t get that product in people’s hands for a price they are willing to pay that still allows you to make a profit, then you do not have a viable idea.
IS YOUR IDEA SCALABLE?
This matters too. If your idea cannot grow with a business, then it won’t work for the long run. You need to make sure you can turn the product into something bigger as you gain success.
If you have a business idea, ask yourself these questions to determine whether or not you have something truly viable. Then go for it!