There is one question I seemed to be asked almost daily, and it always starts with a preface;
. . .“I have a 'great' idea for a business.…and
No one has ever done it before…and,
I know it will be a complete 110% success….
Next, they ask their question....Is my business idea good enough”?
Now, depending where I am, and my mood I first provide my perceptive on the word " Great ", which is:
I firmly believe “great” is the most overstated and misunderstood adjective in the English language. Alexander The Great was great (no pun intended); and according to pop culture so is the irreverent Sponge Bob!
One conquered the Known World, and was honored and revered. And one is a cartoon cult figure on cable TV who lives in a pineapple under the sea
Great does become relative to a thinking mind vs. an emotional mind. Not to mention the time in which we live. Edison invented the light bulb it changed the world, if today you worked on a business plan to develop the light bulb, well you get my drift!
I am certain if you consider this type of analysis you can also cast your own spectrums on the word (TERM) "great".
Back to their original question;
Next, “No one has ever done it before !!!”
Do you mean - Done it successfully, tried it unsuccessfully, thought about it and realized it was doomed to failure, considered the risk vs. reward and said no way…. What is it and how do you know this?
If they are still talking to me after I provided the above information I go a little further -
Finally, as we all know, “good enough” is VERY relative, but I will provide some ideas for you to think through in answering that question for yourself.
Ask the Question Another Way
Not, “Do you think my idea is good enough to start a business?”…what people truly mean is “do you think I’ll make money doing this?”. And in most cases they dream of a lot of money!
The short answer is- most ideas you can think of are good enough to start a business around –truth be told- - - you can probably make some money doing almost anything. Notice I said some, enough to cover startup costs, running expenses and of course profit!
The real question is whether or not your business idea is worth the risk, and will provide adequate reward if it works out. For sake of argument let’s say adequate return is enough money for you to live on, at least replacing your current income.
So now the question changes once again, this time to “given my idea, what is the potential?” We’ll talk about potential in a minute, but first let’s dispel some myths about what your business idea should be.
Business Idea Myths
To make an adequate return, your business idea doesn’t need to be:
- Revolutionary
- Totally unique
- Game changing
- Competition free
Now, you’ll make a heck of a lot more money if your idea happens to be one of the above – but the honest truth is very few of us will invent the new wheel, or be so unique we become our own category.
You can make your adequate return, and then some, if within your business idea you can see your unique selling proposition.
Unique Selling Proposition
Simply put your unique selling proposition (USP) is the reason I’d buy from you and not a competitor. What makes you special, why do you deserve a share of the market?
For example let’s say you want to start a lawn care business. You know lawns, your tomato plants are huge, and the azalea's in your yard are the envy of the neighborhood.
Great – you’d probably make a very good lawn care person, and make money doing it. But, will you make an adequate return?
Probably not if just doing lawn care is eh extent of your idea.
Take for example: Where I live there are literally 1000’s of lawn care people. Why am I buying from you, what’s your USP?
Your potential USP’s may be:
- Creativity
- Service
- Convenience
- Price
HINT – Best not build your USP around price. It’s a very hard way to compete, and only a matter of time before somebody bigger and more efficient comes in a does it cheaper than you. Don’t believe me? Try selling toilet paper cheaper than Costco.
Okay, so you tell me “Matt, my Lawn Care business will focus on organic lawn care that is pesticide free. I offer free same day quotes for service, and tailor my schedule around the homeowners.”
Hey, now we’re on to something. You’ve taken your idea which 1000’s of people do and turned it into a special offering. If I’m into pesticide free gardening, I’m using you and not your competition who killed my cat with chemicals last spring.
The Market Potential
Once you have your business idea, and understand what your USP is, the last piece of the puzzle in deciding whether your idea is good enough is to look at the market potential and assess if it will provide your adequate return.
Three questions to ask when assessing market potential.
1) How big is the market?
2) What share can I get?
3) Is that enough?
Back to your lawn care business.
You know your area has 10,000 homeowners. There are only 2 people in your area providing organic lawn care, and you’ve heard they aren’t very shall we say “customer orientated” – given that you think you can get between 2-5% of the lawn contracts in your neighborhood (a small amount, but you are offering a very specialized service).
That means you can get around 300 contracts from your market. You also know that each lawn is worth about $200/month in profit, which works out to a profit of $60,000/month or $720,000/ year. Is that enough? Is your business idea “good enough”? That’s for you to decide when you run the numbers yourself.
I know, I know, you couldn’t do 300 lawns a month yourself so you’d have to hire people which would cut your profit, but that’s a blog post for another day.
I Summarize
You can see that deciding whether an idea is good enough to start a business around is a VERY relative question.
The good news is most ideas have the potential to make some money, they don’t need to be revolutionary, and quite often you won’t be the “game changer”. If you know your USP, and your market well enough I’m sure you can see how an “ordinary” idea could turn into extra-ordinary profits.
Put into another frame:
What is your product or service / how much will it cost (total cost) you to deliver?
Who are my customers and how and how much will it cost me to reach them?
Simply do the math, but base your answers in this frame with unbiased facts you gather, not simply numbers of hope.
Your job is:
- To decide how much you need for an adequate return,
- Do you have a USP, and
- Do the market dynamics offer enough potential to pursue it?
Good Luck and Happy Marketing-
