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How To Tell If You’ve Had A Winning Business Idea
You’ve had an idea you think could make you some money – but how do you know your business idea is a good one?
If you’ve had an idea that you think you could turn into a business, it’s good practice to do a little research to ensure the idea you’ve had is a good one. Here are some ways to determine if your new business will be viable.
Market Research
Researching the market is crucial before you launch your start-up. Understanding your market as well as its needs and potential is essential to any business.
Identify your market
Who would your potential buyers be? Unless there are people that would buy into your idea, you are not going to be able to take your idea and turn it into a business.
Ask your market if it’s interested
Friends and family may avoid telling you the truth for fear of upsetting you. The best approach is to ask a representative sample of potential customers a few questions:
- Would they be likely to buy it?
- How much would they pay for it?
- Would they buy yours instead of the competition’s? Why?
The internet is a great place to find your potential customers and ask these questions. You might want to find a site that will allow you to set up a survey for free and send the link to relevant people.
Competition
It is essential to know who your competition is and how you could differentiate yourself from them. In a nutshell, why would potential customers buy from your rather than from your competitors?
If you’d like some more market research ideas, here are 10 key questions to ask while carrying out market research.
Product Research
Purpose of your product or service
Is your idea just a gimmick, or will it serve a real purpose? Customers tend to buy products and services that solve the problems they are facing. You need to ensure people will have a solid reason to purchase from your potential company.
Is the idea viable?
Does your product idea make sense? Is there a market for this specific product? Is it financially viable? If you are able to answer these questions positively and confidently, you may have a real chance at turning your idea into a business.
Business Analysis
Profitability
When calculating profitability, it is important to calculate a realistic selling price vs. costs and overheads. Anyone starting a business would usually be aiming to make a profit. If the product is not viable, the business can’t be sustained.
Growth Potential
All businesses should have room for growth, especially start-ups. It is therefore essential to wisely estimate the business’ growth potential in terms of market and in terms of product.
If you’ve determined that your business idea is a winning one, we’ve got a great range of company formation packages to help you get started