The desire to start a business starts with a small idea that is formed in our head. The problem is that we do not know if that idea is good enough to make the jump and start our own business and that, not all ideas are good when you study them more thoroughly.
Have you been frustrated because you constantly have innovative business ideas but do not know how good they are?
Many people do not have any problem in that they come up with new ideas continuously, but they struggle with the difficulty of not knowing how to detect if an idea will have a future or not.
Therefore, many ideas of new products or services never see the light of day.
And I think, that all those innovative and creative people simply need to know what are the important questions that must be asked to know if that winning idea they have in mind has a future.
Taking a time to evaluate and choose an idea that has potential, in the early stages of an undertaking, I consider it a better option than starting blind.
Devoting a large amount of time and money to launching a business idea that ultimately will not work and worse still, that is not aligned with your personal and / or professional goals, will only make you end up failing and feeling frustrated.
For the same reason, today I show you 5 questions that will serve as a means to know how to distinguish good ideas from not so good ones.
My main goal is that you can establish a minimum process that serves as a filter to evaluate each of your ideas.
These five questions can serve as a basic questionnaire and a simple way to discover the potential of a business idea.
However, in no way should you believe that they are the only step you must take to validate your idea.
I believe that before entering a new business, each entrepreneur should at least answer these 5 basic questions. So, here we go!
5 questions you should ask yourself to know if you have a good business idea
1. Who are your customers?
Describing your target client is one of the first things you should do and strive to be as specific as you can.
If your service is coaching for people who want to lose weight, here is not worth writing that your ideal client is a person with the problem of losing weight, between 20 to 50 years.
Indicate that your potential client could be “anyone” who has problems of overweight, is too broad.
At this point you should be very specific and try to make the description of your potential client quite detailed.
In this way, it will be easier for you to create products or services that really cover an existing need in the market.
Let’s continue with the previous example, if you are a coach that helps people lose weight, then your ideal client could be …
- A woman
- Between 25-35 years.
- Who lives in Guatemala City.
- She works as a secretary for a recognized company.
- Her monthly salary is between $500 to $800.
- She has no children.
- She studies a university career so he does not have time to do physical activity. On weekends she loves to go to eat at good restaurants with her family or go for a walk with her friends.
Ok, now you have the profile of your defined potential client and you know what product or service you can create to meet your needs.
Product or B2B service (Business to Business)
If your product or service is focused on companies, such as a system to keep accounts.
It must be taken into account that the same solution can be directed to a small business, a multinational company, SMEs or a chain of stores.
Therefore, it would be up to you to decide who will be your ideal client and, based on your decision, draw up the profile of that potential client.
Another point that is important with B2B clients is that you must also specify the user of the product or service.
- Will the end user be a Financial Manager or the Accountant of the Company? Or will they both be?
- Is your product or service aimed at a small business owner, an assistant or a billing specialist?
2. What is the real need of your client?
Put another way, what is that customer frustration that your product or service can satisfy?
The types of need may be different, it may be an ingenious or tragic unfulfilled need.
For example, a tragic unmet need can be a pacemaker.
When in 2013 they told us that my father was heart sick because he was beating slowly and unpredictably and that his life was in danger, they recommended surgery to put a pacemaker which saved his life at that time.
The inventors of the pacemaker saw a tragic unmet need and invented something to satisfy it.
An example of an ingenious unsatisfied need could be any service or product that is related to satisfying a need but that does not depend on saving someone’s life.
For example, currently the world of the Internet is full of people offering their own products or services.
They have created their own brands and have seen a potential market to whom to offer their creations.
I have seen people offering very complete courses, templates, downloadable books and even unique craft products, satisfying needs in a novel, ingenious and innovative way.
So, if your product or service meets an urgent need, you will find greater demand.
On the contrary, if your product or service resolves a need that is not urgent or that is not critical to live, the demand will be a little lower and it may cost you a little more to obtain economic benefits (this is not a rule, it all depends of the execution of the strategy).
However, we must also take into account that you cannot always create a product or service that meets an urgent need. But you can create something that solves a need that is causing real frustration to someone else.
How are your clients solving their need right now?
If you have noticed that there is a need that you can solve in some way, it is important that you see and analyze how people are meeting that need at that time.
This is where you can find out if people are using an efficient or less elegant way to solve the problem and from your findings you can create a different way to satisfy the need.
That’s right, how many innovative ideas are born that satisfy needs in an ingenious way.
3. How do you describe your solution?
Being able to describe your solution in a clear, concise and unique way is something you have to work on from the beginning.
Having an elevator pitch that allows you to transmit the real benefit of your proposal or that effectively describes what people will get from your product or service is essential.
One of the ways you can validate your business idea is by putting it in front of people. And if you do not have a prototype of your product or service, the elevator pitch is the perfect way to describe your solution and for people to understand why they should have it.
And to put it to the test, go out there and tell it to several people who do not know anything about your idea, product or service. This way you can get comments that will allow you to perfect it.
Make sure that people understand if your solution is a product or service, whether it is a mobile application or a physical product.
You cannot imagine the amount of entrepreneurs who cannot clearly convey their solution and leave their listeners confused.
Collect all the information you get and improve your elevator pitch more and more.
4. What is the benefit of your customers?
This question is related to question number two: what is the real need of your client?
If you ask how people will benefit when they obtain your product or service, you can more easily elaborate a “value proposition”.
Having a well-defined value proposition will help you differentiate your product or service from the rest, because if people perceive that your solution is equal to what exists in the market, it will become a commodity.
To formulate your value proposal you can answer four more questions:
- What is the problem you solve?
- What is the opportunity you detect in the market?
- What is the need that you satisfy?
- What are the benefits you will provide?
With the previous example of the coach to lose weight, we can formulate your value proposal as follows:
What is the problem it solves? Helping single and busy women lose weight.
What is the opportunity that is detected in the market? That there is a group of women who have enough income to pay a coach to help them lead a healthy lifestyle.
What is the need that satisfies? There are busy women who want to lose weight and lead a healthy lifestyle.
What are the benefits it will provide? Personalized help, menus and exercises designed for people who have a very busy lifestyle. In addition to support, support and encouragement so that people do not give up so easily. And a long etc. You can add all the benefits that you can think of, as long as you can keep your promises.
5. Is it worth moving on?
Some ideas may seem strong at first sight and as you filter them, you soon realize that they have many gaps and that they will not prosper.
To filter your ideas you can use methods such as the creation of a Canvas Business Model.
A Canvas will allow you to visualize on a sheet of paper if the determining areas of the future business are covered, if they will work, if you can improve them or if, on the contrary, the idea is finally weak.
If you discover that the idea does not have much potential, it is better to abandon it and continue with the next idea.
Now, if the preliminary idea shows to have a future then it may be worthwhile to carry out a more detailed analysis, elaborating other deeper questions or a more solid business plan.
There is no infallible method to validate a business idea but without a doubt, asking the right questions when you start in the world of entrepreneurship will allow you to have a clearer idea of whether your product or service will have a future.