Nothing is worse than starting a new business only to find out that, after significant hard work, it has a serious fundamental flaw that will likely prevent it from truly succeeding. If you've seen the show Shark Tank, one of my favorite shows, the investors are often brutally honest in revealing why the contestants ideas aren't worth investing in.
Like the sharks, I'm going to be speaking from experience and will be shedding light on critical issues to look out for when creating a new company. Here's seven ways to ensure your next business idea will be evergreen and alive 10+ years from today.
1. Always start with a trademark search and competitive research
Imagine building a successful business, and then after several successful years, being served a notice of trademark infringement from a business with the exact same name as yours that has been around much longer than you. Not a position you want to be in.
A trademark search will help ensure that another company hasn't already trademarked your business name. It's worth also checking international trademarks if you're doing business in those countries, such as China and the UK.
Do some competitive research on Google to see if any companies exist with the same name. If a company has been around longer than you with the same name, trademarked or not, they may be able to contest your trademark if it's in a similar field and they can prove they've been doing commerce longer than you. Protect yourself and do some research before finalizing your business name. Lastly, get it trademarked so that it's yours.
2. Don't step on any toes
It's a dangerous game to start a business that is "grey" by nature, such as services that are technically not against the law yet but may be in the future, or that violate other companies' terms of service.
Make sure your business idea won't upset other companies, and if it does, make sure that you are legally protected and consult a lawyer prior to starting your business.
For example, many internet proxy providers were shocked to see a United States court ruling by California Judge Breyer, which ruled that the use of a proxy is illegal. While proxies by nature are not necessarily unethical, they are commonly used for nefarious purposes, and it was only a matter of time before new laws restricted them. Take care to make sure your business idea is future-proof and isn't in a "grey" area of business.
3. Do a domain search
If you own a business, you're going to eventually want a website. It's worth checking to see if the .com is available in your business name, and it may make or break your decision on your business name. Websites such as DDwhois use AJAX for domain name availability look-ups, and make it easy to do many searches on the fly while coming up with your business name.
4. Make sure it's legal in your country
Some businesses may be perfectly legal in other countries, but illegal in your own (or vice-versa). Once you know where you're going to be primarily doing business, do some research on local laws (as well as your own) to ensure that you're protected and doing business that abides by the law.
5. Consider the future and shifts in technology
Is an iPhone app business future-proof? Probably not. Some things just aren't going to be around in 10 years, and building a business solely around these technologies could be setting yourself up for a major drop in business down the line.
Consider the future and whether or not your business and product/services will be in demand. A lot can change in a few years.
6. Choose a scalable business model
On Shark Tank, there was an episode where a young bakery was doing very well, and required a sizeable investment from the Sharks to continue operations. However, they weren't open to hiring additional employees or upgrading to a larger workspace, and there was no way that they were going to be able to keep up with the demand from their consumers.
You don't want to build a business that you (and only you) can maintain. As I had quoted in one of my previous posts, "hire when it hurts"; if your business is exceeding your ability to fulfill the demand, you're going to want to be able to hire or scale your business to accommodate it's growth. Otherwise, you'll be severely bottlenecked and will hurt your reputation with the customers you'll have to turn down.
7. Make sure there's a market for it
Niche products and ideas are all well and good, and many have made a small fortune from them, but with a smaller and oftentimes pickier consumer base, they are also riskier and more difficult to sell to.
Do your research to confirm that there's a healthy demand for what you're selling. If the majority of people on Earth wouldn't buy from you, there's a good chance you're going to be working uphill when selling your product or services.
With these pointers in mind, there's no saying your business model won't succeed even if it isn't scalable, or has a very small market (or even if it isn't future-proof). However, if you're looking to come up with a stable and reliable business model, these tips will help build a company that will be bulletproof for years to come.