It’s getting more challenging to develop a business idea in a world where an estimated 100 million new companies are formed every year. However, even if you are offering a comparable product or service, you may still differentiate yourself by providing a unique experience that will give you an advantage over your competition.
Businesses large and small have been compelled to pivot to meet the changing demands of their clients as a result of today’s problems. Interactions that fail to convey value to target consumers adequately will result in market collapse. Furthermore, diminished purchasing power during a slowdown implies that a business idea that would have been successful a year ago may now be less successful, and vice versa.
The most challenging task at this point is identifying the factors that will cause your idea to fail or to be deemed unworthy of future development. It is critical to separate the best from the bad to get off the correct foot when starting.
But how will you tell the difference between what’s awful and what’s worth pursuing?
1. Does it Provide a Solution to an Existing Worthy Problem?
An excellent idea helps to solve a genuine problem. It is something that people are already interested in and would be willing to pay if they could find it.
On the other hand, an issue is a challenge your customer is experiencing while performing a project. There might be a variety of obstacles that prohibit them from doing their duties. An excellent idea can readily assist in removing a challenging or impossible hurdle.
Some of the reasons why a business idea is not worth pursuing are as follows:
- The problem does not exist: If you do not understand the problem, it is impossible to develop an innovative company proposal. If there isn’t an issue, your remedy would very definitely be unnecessary. You shouldn’t waste your time and money producing something that no one would ever use or appreciate. It is pointless to innovate only for the sake of innovation. If they do not find any value in what you are providing them, it will not be positive.
- The problem it addresses has already been resolved: there might be various factors contributing to this. One of your competitors may have already taken the initiative and adopted the solution before you. In other words, they may have had a lot of success in presenting the answer to their prospective consumers.
- The challenge is not that significant: not every concern is worth attempting to resolve. Some issues are modest and do not have a substantial impact on people’s lives. An example of that would be that you want to open an online business that offers several highlighters, but you believe there is little demand among students.
2. Does the Idea Bring Value to the Customer’s Experience?
What your consumers receive in exchange for their money is referred to as value. They should consider your product the most cost-effective spend or investment for a specific problem they are trying to solve.
Some of the reasons why such a business idea is not helpful might be due to:
- Customers do not benefit from the solution since it lacks utility.
- It doesn’t matter how original your idea is; if it doesn’t provide value, they will have no incentive to purchase it unless it is compelling.
The consumer wants you to make their daily lives more accessible by assisting them in saving time, money, or effort that would otherwise be on alternative solutions available on the market. If you provide them with something that does not add value to their lives, they will likely search for other alternatives.
It is impossible to provide a resolution compatible with customer expectations. A brilliant business idea offers a consistent solution with consumer expectations. People are looking for anything that will give them the results they anticipate.
It should not leave them feeling disillusioned or frustrated at the end of the day. If you do not provide someone with what they expect, your concept will fail to get their support.
3. Do I Have a Head Start on the Competition?
Even if you have a solution, it does not always imply you have an advantage over your competitors. You must be a trailblazer for your idea and, more crucially, prevent others from copying your model. It may imply being the market leader while everyone else is still finding out their plan for competing.
What do you think: will your rivals be able to catch up with your offering quickly, or will you be the only one with an operational model for a few months? As a result, if your primary rivals are large, well-funded corporations, the development period will be significantly shorter, and you should concentrate your efforts on refining development and manufacturing. Whatever the playing field looks like, you’ll want to legally protect your concept through intellectual property (IP) or trademark registration.
The longer you’ve worked on your idea, the more you’ll be able to customize it to be relevant in today’s world, especially in the new normal. Also, it is essential to adopt adaptation as early as possible.
From the beginning of your journey, you should recognize the need to continuously verify findings and solicit feedback (particularly negative feedback) from your team. Who knows, you could gather enough information to realize that the solution you developed for stay-at-home mums is also ideal for middle-aged men who are forced to live under lockdown. Whatever research you have accumulated through time will serve as your most effective weapon in the quest for product/market fit in a constantly shifting environment.
4. Is Your Business Idea One that can be Scaled?
The capacity to scale your brand is critical to its success. The ability to grow and scale your company should be straightforward after you’ve developed a viable concept with a distinct competitive advantage.
A scalable business is one in which you can scale your service to serve a bigger market. You may do this by expanding your network of branches, recruiting additional employees, boosting manufacturing capacity, and so on.
In a harsh competitive environment, a scalable firm has a higher chance of being successful.
It is pointless to start a firm with an idea that cannot be scaled up. If you make adjustments to the concept in the future, it must still produce the intended results.
Reasons why a business plan is unworthy of consideration:
- There is no room for scalability within the plan: Some organizations cannot scale up their operations by expanding geographically or improving their production management. The growth and expansion of your company will be limited if your business plan does not provide such prospects for growth.
- Increasing the size of your operation can be challenging: Depending on the type of product or service you are providing, increasing the size of your process might be difficult. If it requires additional resources, time, and effort to scale up, it may put your company’s survival in danger.
5. Do you have a Clearly Defined Target Audience in Mind?
The target audience is the group of people who your product offering will target. It is preferable to locate genuine potential clients rather than making educated guesses about who will be interested in purchasing your goods or service in the first place.
Before making any investments or putting your business ideas into action, you must determine who your target audience is for it. Also, remember that you do not spend time and resources on customers who are not interested in purchasing your product.
If you have an idea but don’t know who to direct your efforts toward, your efforts will be dispersed. Some of you may be unsure how to get in touch with them or connect with them. This can simply confuse the customer’s mind about what sort of goods or services you are providing them.
Your product or service may be excellent, be it a mobile app, website, or any other, but if you have not placed yourself in the consumer’s shoes and designed it to meet their requirements, you are doomed to disappointment. This is because your giving will be unable to suit the needs of these individuals, and as a result, they won’t value your contribution much.
6. Is Your Concept a Good Fit for Your Abilities?
Consider your strengths and shortcomings before committing to a final version of an idea. If you believe you have the necessary talents to move a project ahead, you should pursue it. If you don’t have any of these qualities or have flaws that will hinder the implementation of your plan. You should avoid doing so since it will be a significant headache for you.
To begin, do a SWOT analysis. It is a straightforward method of gaining an understanding of your strengths and identifying possible flaws. SWOT analysis is used to determine the strengths, weaknesses, opportunities, and threats connected with a situation.
It looks at performance from four perspectives: internal variables (strengths and weaknesses), external influences, and other factors (opportunities and threats). When developing an idea, make sure to examine all of the possible perspectives.
The Bottom Line
Open the internet, and you’ll find countless ideas floating around, but not all of them are worth pursuing. When an idea is not viable, there are various things to consider. Like you must determine whether your company idea fits into this group. You will benefit financially from investing more time in studying this before establishing your business.
However, you must be able to distinguish between a good idea and a terrible one. Your proposal should focus on customers’ needs and be scalable, resource-efficient, and lucrative when implemented. If you are unsure about any of these components of the idea, it would be best for you to hold off until you come up with something worthy of your time and effort.
Nishanth is a Startup Specialist working at NeoITO – a reliable Software Development Company based in the USA. He is an avid reader, and writer, and works closely with entrepreneurs to stay updated on the latest.