Before you launch your amazing product or service, make sure you have a winning idea and not a waste of time. Although there's no business crystal ball that you can look in to determine if it will work out, you can use a very reliable system to determine if you should invest any more time, talent or resources to develop the idea further.
Answer the following questions to determine if you have a good business idea:
1. Does your idea have a mission or a vision? A good idea attracts and inspires people to want to rally around the greater cause. What is your ultimate goal? What motivates you to want to pursue this idea? Is it something you can stick with when times are tough? Because times will get tough. Your idea should be one that you are passionate enough about to work at making it happen at all cost.
2. Is there market for it? People spend money on products and services that solve problems for them. The problem needs to be a big enough issue that people care enough about to want it solved. Spend time researching your idea and market, see if it's been done before and if anyone else has become successful at it.
Even if your idea is one that's been done before, you should add an innovative twist that puts you above the competition. Dominos didn't invent the pizza parlor and they weren't the first to deliver pizza, but they did do it in 30 minutes or less.
When we launched my daughter's nail polish line Superstar Nail Lacquer it took off quickly because the fast-drying formula solved the problem of the long-wait time for nails to dry. Paired with bright bold colors inspired by Fashion Week designs, the product instantly became a celebrity favorite. She took an already existing product, improved the formula and created an attractive marketing plan that set her apart from the competition and people took notice.
3. Is your idea scalable? A good business idea must have room for expansion. Even if you start small, you need a plan for expansion later. One of my clients, Omada, created medical notepads to help her patients communicate better with their doctors. That product grew into a greater service of helping her patients relieve stress in all areas of their life. In business we often take zigzags. There's no straight line, but you should certainly start with a foundation that you can build and expand on over time as the market grows and changes.
4. Is it profitable? In order to be successful in business you have to make money. Your products and services must have low investment and high profit margin. The faster you can make money from your idea, the bigger chance you have at succeeding with the business. Research to find out the average cost of running a business similar to what you want to start. Also, consider your ideal price point. Taking the time to count up the cost earlier on can save you a lot of time and money.
For most startups, you can expect some kind of investment when launching. However, if your startup costs are too much of a burden, it will be hard for you to stick with this business.