The business idea is the reason why you think you’ve got a business opportunity.John di Stefano
This can be a product or a service or anything else that might be of value for someone to pay for. And with this we already come to the point. A business is based on the exchange of values – and it is very important to understand that.
A business idea must be a solution to a problem someone wants to pay for. An idea to make our skies green instead of blue is most likely not a business idea. It might be fun, but does it solve a problem and is anyone willing to pay for that?
Let me give you an example. A few years ago I was living in Spain on a coastline frequented by many tourists during the summer months. Wherever there are tourists you always find the odd crook looking for an opportunity to either steal or con anyone vulnerable enough. So imagine yourself alone on the beach with today’s basic essentials, like your mobile phone, keys and wallet.
What do you do if you want to go for a swim? You can’t really leave your stuff on the beach. It would most likely disappear. You could ask the people next to you to watch your stuff, but that is not a perfect solution either. Seeing this problem right in front of me, I thought, why are there no lockers on beaches? It’s something they’ve been doing in swimming halls since I was a kid.
There it was, the first idea. The next step was to find out if anyone was doing this already and if so, how are they doing it. I wanted to know if this could be a valid business idea. After a bit of research (partly thanks to today’s search engines), I found nobody, except a few beach bars which offered that service to customers or people they knew.
For most this would be really good news, but for me this was not what I wanted to find out. In my experience there is often a reason why it hasn’t been done yet, especially something so obvious and easy. There could be legal issues, licensing issues or many other reasons why nobody has started that business yet.
For any business the most important part is always to find out if there are potential customers willing to pay for it.
Let me explain why this is the first and most important point. Let’s say you find out that it requires expensive licensing, or that this is legally protected. Whatever you find out, based on a plus or minus scale will always be negative. This might kill the idea before you even started and it might cost you a lot of time and money to find this out in the first place.
Also, it will most likely stop you from pursuing this idea, because most of the things you will discover are problems that need solving without knowing if it is worth it. Instead, if you start with the other side and take some time speaking to the potential customers to find out if your idea would solve a problem they would be willing to pay for, you could either save yourself a lot of hassle or find a lot of points to go on the plus side of your scales.
Don’t think the idea is great for everyone because you think it is. You need to check this out!
That is exactly what I did. I just asked everyone around if they see the same problem and if they would use such a system to safeguard their belongings while they are going for a swim. I collected a lot of other ideas based on the responses from the potential customers and the idea became clearer and clearer.
Speaking to many start-ups, they are worried their ideas might be stolen by someone, if they talk openly about it. I am still looking for the entrepreneur who actually experienced that and even so, it easily outweighs the risk of investing in a business without testing the waters before you start.
Research that brings results
Now I had a real business idea. It solves a problem and has enough potential customers to look deeper into it. The next steps were clear. I investigated all the pitfalls that might stop the idea in its tracks and then assessed my situation based on the plus and minus scales. If it would show a minus, I would let it go, otherwise I would go for it.
In this case I went for it. There were licensing issues, but because I knew that there are lots of potential customers and because I had all their great feedback, I felt comfortable to pursue that idea.
Also check your idea for the right timing. If I would have tested my idea in the winter the results would probably been very different than in the summer, when the beaches are full.
One important point. Being an entrepreneur is about taking some risk to make an idea happen.
That is what makes an entrepreneur. Don’t ever let anyone tell you that something doesn’t work. If you believe it does and you are willing to put in the work to investigate, test and to make it happen, it most likely will. Here I am only describing my way of assessing an idea, but there have been many occasions when I just went for it and I loved every minute of it.
If you have any great ideas and if you are looking for support to make it happen, contact us. We love to help you!