A business worth pursuing has a clear path to revenue and decent market pull.
Anyone can come up with a business idea. But finding an idea worth pursuing is really hard.
Unless you plan on doing a non-profit, you need revenue. You need to generate profit quickly, ideally over a short sale cycle. So consider vetting your idea against some strict criteria before you pursue it.
Brainstorming business ideas requires creativity, certainly, but it also requires strategy. An effective strategy is to consider what people and businesses currently pay for. Then, think of how you can improve it.
- What have I learned at work, while building a business, or while consulting?
- What doesn’t work?
- What can be improved?
- What challenges did I face?
- What did I pay for? What do businesses pay for?
- What are the core revenue drivers for businesses?
Ultimately, you want to find a product or service that you can scale or improve, that already exists in some shape or form, AND that businesses or consumers are paying for.
A good idea will be a no-brainer.
It should be an obvious value add for your customer.
So if you know that businesses pay for revenue, qualified leads, and reducing costs, can you create a product or service that has one of these benefits?
If consumers pay for pleasure, status, and food, can you make something that directly satisfies their deep-seated needs or desires?
Here are the questions you should consider asking yourself before dedicating your mental energy, time, and resources to building a company:
1. Will this be profitable?
- How many sales do you need to make the idea profitable and hit your target revenue/year?
- Do you have significant costs? If so, include them.
2. What is the value?
- What benefit (QUANTITATIVE if possible) will your client gain from your idea?
- How much money will they make?
- How much time/money will they save?
- How many pounds or kilos will they lose/gain?
3. How do you prove the value?
- What do you need to do to prove that your product/service is valuable?
- How many qualified leads does a client want to see to justify the purchase?
- How much time does a client want to save to justify the purchase?
- How can you prove that your product/service is DIRECTLY responsible for these benefits?
4. Are people willing to pay?
- When you cold-call them, are people interested in talking about the idea?
- Are they willing to pay?
- Can you find people that commit to paying (letter of intent or deposit)?
- What price are they willing to pay?
- Is the sale process repeatable? How will you find your customers?
- Ultimately: do you have a CLEAR path to revenue?
5. Is this a business worth pursuing?
- How easy was it to get people to commit?
- How much time would you have to spend offering the solution?
- And selling it?
- Is there a market pull? I.e. do people DEMAND your idea, are super excited for it, etc.
Finding an idea worth pursuing is difficult.
And you might learn these lessons the hard way, like I did, by focusing on mediocre ideas at first. But while doing this will teach you a lot, if you ask yourself these had questions early on, you'll avoid wasting a lot of time and energy.
Best of luck! And let me know how I can help.