At the core of any business lies not the product or service it offers but rather the business idea. The business idea is what gives you—the entrepreneur—drive to start up a business, and is the foundation from which your business will grow and develop. It’s also what compels financiers to invest in startups that don’t have much yet to show for. Clearly, the business idea is salient to your potential business’ success, and it helps to have a clear understanding of what your business idea is before registering your trade name.
But what factors should you consider when defining your business idea and evaluating its commercial potential?
First, consider its degree of innovation. The definition of innovation is protean and can mean a new product, service, or even way of doing business. This doesn’t mean, however, that an idea only has to be original to be innovative. Actually most ideas aren’t original, you are just not aware of the other people who came up with it. An innovative idea must create value for customers, not only satisfying a particular need or want but also providing a unique benefit—a unique selling point—for which customers are willing to pay. Innovation is what will distinguish your startup from competitors, and will be the driving force for your customers’ loyalty. Think about whether your business idea is truly “innovative,” and know clearly how your business will deliver benefit to customers.
Second, consider its feasibility. Even a truly innovative idea may not prove profitable enough for a business to survive. First, make sure that in delineating your business idea, you’ve also determined a long-term method of obtaining revenue. Second, define the market your idea is aimed at. Consider the size of this market and the degree of competition—is your idea sufficient to establish a customer base and grow in the long term?
These are just only 2 important factors that you should consider when assessing your business idea. Starting a business—even with a brilliant concept—is an enormous risk, but every entrepreneur would benefit from having a clear, solid business idea right from the start. And then, once you have that solid business idea, make sure you flexible to change. You will learn a lot trying to execute it that you didn’t know. Learn from that and adapt your business idea to it to become successful.
Have a good grasp of your business idea? When your answer is “yes,” be sure to complete the Idea Mission in Investeur’s Startup Buddy. By using Investeur’s Startup Buddy, you can later on be matched with suitable startup investment companies or angel investors to grow your idea to the next level.