How to Decide if a Business Idea is Worth Pursuing
You got big ideas, and you're desperate to start your own business, but how do you know if your business idea is any good? This article will give you 15 questions you need to answer about your business idea to help you'd decide if it's worth pursuing or not.
Before we get into the questions (feel free to scroll down if you're that impatient!), let's talk about the elephant in the room; market research. You will not be ready to launch any new business idea until you've completed your market research and produced some detailed and realistic financial projections - in other words, the best way to validate a business idea is to write a business plan.
Having a plan - even a BAD plan - is better than having no plan at all, regardless of what it is you're trying to achieve in life. Even people with a bad plan get better results than people with no plan.
So few new businesses owners do this though!
I write lots of professional business plans for clients and they all find the exercise extremely valuable in proving the viability of their idea, and giving them the confidence to jump into their new venture with both feet and have a reasonable degree of certainty that their idea will work, so long as they put the work in.
Having a quality business plan is also essential if you want to secure any type of business funding or investment, as the lenders/investors will want to see that you’ve got a solid plan in place, that you are a competent business leader, and that you’ve done everything possible to de-risk the investment for them (the potential gains need to be high enough and likely enough to be realised that they outweigh any potential risk of failure).
So, before you can take that leap of faith you need to answer a few simple questions:
What problem needs solving?
How can I solve it in a way that produces the best results for my clients, and that produces the highest amount of income and profits possible?
How many people need a solution to this problem?
Who are they and where do they hang out?
How will you market your product/service to them in a way that gets their attention?
How much money are they willing to pay for a solution (or, how much is the problem currently costing them)?
What infrastructure do you need in place to deliver your solution?
What will the ongoing monthly costs be associated with running that infrastructure?
How much capital do you need to get started? Where will you get it from?
What will your projected cashflow be over the first 12 months?
How profitable might your business be over the first 3 years?
What could go wrong?
What are your strengths and weaknesses?
Who are your competitors? What do they do well, and what do they not do so well?
What’s your contingency plan? What will you do if things don’t work out the way you expect?
Yes, this can be a lengthy exercise but the reality is that if you can do this yourself it will only cost you your time. Even if you were to hire a professional business plan writer like me, it’ll only cost you £1k for a fully comprehensive investor ready business plan which is a damn sight cheaper than losing £25k of savings on a business idea that was doomed to failure from the start.
Putting the cost verses the benefits into context even further, £1,000 is a small investment for something that can then be used to secure tens of thousands, or even hundreds of thousands of pounds of investment into your business.
I’ve written a very detailed blog that will walk you through the steps of how to write a ‘Bulletproof Business Plan’ if you fancy having a go yourself. You can read the full article HERE.
Or, if you’d like someone to take what can be a mammoth task off your hands, get in touch with me and I’ll be happy to talk you through how our done-for-you ‘Business Plan Writing Service’ can help.