Building a thriving startup takes plenty of energy and drive. But all your efforts will be wasted if you pour them into an idea that’s fundamentally flawed.
How can you tell if your entrepreneurial idea is worth pursuing? Here are seven questions that will help you decide on its potential success.
1) Does It Excite You?
Does the idea fill you with excitement? Without a passion for your business, you’ll struggle to put in the hours needed for success. And if you’re not strongly motivated by your idea, you’ll also struggle to inspire staff and get the best out of them.
2) Is It Easy to Start?
Can your company be up and running relatively quickly and with minimal investment? Even the biggest businesses need to start somewhere, and it’s important that you can see tangible results reasonably quickly.
If you need to spend months or years developing your business before you see any return, you may find your niche has left you behind. You’ll also risk running out of funds before the profit starts to roll in.
3) Is There a Market?
Before committing resources to a project, make sure you explore the potential market. Very few startups offer something genuinely new that carves out a niche, so do some basic market research to find out if you’ll have enough potential customers to sell to.
4) What Makes You Different?
But with any profitable business idea, you’ll find competitors already exploiting it. What can you offer that’s different? What sets your product apart from what’s already available?
Importantly, don’t think you can compete in a busy niche entirely on price. No matter how low you go, there’ll always be someone who can undercut you.
5) Is it Sustainable?
When you start a company, you want to be in it for the long haul. Is the market you’re entering sustainable, or is it based around a temporary fad that could soon pass? Can you build on your basic offering, improving it to stay current as the years pass?
And importantly, could a powerful competitor easily move in on your idea and take the market for themselves?
6) Is it Scalable?
A company that can’t function without its founder isn’t likely to have a long future. Does your idea allow you to develop the company so that it can grow and succeed without your constant input? If there’s no way to delegate essential task to staff, you’re not running a business you’re working a job.
7) Is it Explainable?
Lastly, can you summarize your business idea in a few sentences? This is important for two reasons. First, you’ll need to provide a simple hook for investors if you want to find funding.
Just as important, if you can distill your concept down to its basics you’ll have a much clearer idea in your own mind of what you’re trying to achieve and the approaches you need to take.
Founding a startup will always involve risk. Even the best business ideas executed perfectly can be sunk by factors outside of your control. But making sure your idea is sound from the beginning sets you on the right track toward success.