Evaluating Business Ideas

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You probably have a business idea rattling around in your brain. It is probably making so much noise that you can’t think of anything else. You are sure you have the killer idea to make the next huge business hit. That is fantastic, but before you start throwing people and resources into your new obsession, I have a series of questions for you to consider. Answering these questions upfront will save you a ton of trouble in the future.

What is the problem you are solving? You want to make sure you have a clear problem and have identified an initial target customer base that is searching for a solution. Is this a problem you understand well enough to be sure there is not already a decent solution out there? It is hard to get people en masse to switch to a new service or app. There has to be a real pain point that your new business is going to be addressing to get their attention.

Do you have a solution that is differentiated enough to compete? You need to insure you have a great handle on the competition. Who else is out there trying to solve this problem? What gaps have their solution left for you to exploit? What portion of the potential user base really dislikes the existing solution? Make sure you do your homework. Survey potential customers and don’t let your own bias for your solution overpower what they are trying to tell you about the competition. Your business is going nowhere if you don’t get this right and find a niche market to launch in.

Can your solution be scaled? This is one that a lot of entrepreneurs struggle with. How big is your initial target market? How hard is it going to be to find them and let them know about your new service? Will they be open to trying something different or closed to new ideas? You want to attack a market that can scale while also need to identify a first target customer base that you can segment and blitz. Make sure you understand the total market available for your new business.

Why are you uniquely qualified to solve the problem you are attacking? This is a great test of whether you have a fighting chance with this new business. This concept is often referred to as founder market fit. Do you have a deep passion to solve a problem from your own life? Do you know something about the market or the customers that the existing players seem to be missing? Do you have connections that are hard to duplicate with potential customers or influencers in the space? Do you have unique skills coding or marketing or something that will give you a leg up? Just because you have a good idea doesn’t mean you are the right person to build a business for that idea, or maybe you need to find a co-founder to team with that covers the areas you are weaker in.