Convinced you’ve got the next big idea?
Before you rush into any decisions, consult this checklist to determine whether the market needs or wants your idea.
Is your idea new?
Today it’s easy to find out if your idea has already occurred to somebody else. Head to Google and search for every combination of terms you can think of. For example, if your grand plan involves running shoes for cats, make sure you check for every combination of your key words. Runners, sand shoes, jogging shoes and exercise shoes are common alternatives to the phrase ‘running shoes’, while Persian, Siamese, kitten and kitty are sometimes used in place of the word cat.
If your idea already exists, is your solution better than the current options on the market?
It’s possible to make money by improving on an idea – generally when the original could be better-executed. Is there a related item on the market that falls short? Think about ways to turn a good idea into a brilliant one.
Motorola produced the first mobile phone, but Apple changed the world with its iPhone many years later. The lesson is: if somebody beats you to the crunch, your vision needs to be exceptional.
Great inventions tend to take off if they skip a step. Consider the self-serve DVD kiosks popping up in shopping centres around Australia. Rental costs to accommodate the machines are miniscule compared to traditional stores, and there’s no need to hire staff. Customers love the kiosk because they’re convenient and simple to use.
Does it solve a problem?
The very best business ideas stem from a simple desire to solve a common problem. Accommodation-sharing website Airbnb came to life in San Francisco when a big conference came to town and two locals realised there wouldn’t be enough hotel rooms for everybody.
Professor Graeme Clark was inspired by his hearing-impaired father to invent the Cochlear hearing implant. A pharmacist, his father was often forced to ask his customers to speak up – an embarrassing situation for all.
Ask yourself: does your idea solve a specific problem – one that isn’t satisfactorily resolved by existing options on the market?
Identify your market
Of course the object is to sell your idea. But it’ll save you a whole lot of money and heartache if you start by finding out if customers will actually fork out money for it.
The best starting point is performing a break-even analysis to establish how many people are likely to pay for it, where they’re from, when they tend to make purchases of items like yours, and whether this will cover costs.
Ask friends and family if they think your idea has merit – and tell them you want brutal honesty. Use the internet: it’s a rich resource of statistical information. Scour relevant industry and trade magazines for information about your demographic and its needs and spending habits.
If your chosen market is already well-served, is there a niche you can carve out? Is there a way you can become the number one option?
Do you have an elevator pitch?
The best ideas don’t need much explaining. They can usually be summed up in one sentence – even if the concept behind it is complicated.
People won’t fall in love with your idea unless they can understand what it is, and how it’ll benefit them.
A good starting point is devising a mission statement, or slogan.
Mind-boggling technology is the basis of everything Microsoft does, but the company’s mission statement is clear and concise: “At Microsoft, our mission is to enable people and businesses throughout the world to realize their full potential.”
Work out your own mission statement, and keep it in mind when making decisions.
Bear in mind that the most successful businesses were formed by somebody passionate about an idea. Getting established will be a grind, but if you are fully committed to your idea, those founding years will be far more enjoyable.
Choose a business model
How will you make money roll in on a steady basis? Does your idea lend itself to a one-off fee, or perhaps a monthly subscription model, or a lease option?
The person trying to sell the first photocopier hit one brick wall after another. Nobody could afford the high investment – even though the technology was a revolution. An ingenious person came up with the idea for companies to lease the machines rather than buy them outright – and uptake for the copiers quickly took off. It’s a great example of adapting to meet the market.
Is your business idea scalable?
The best businesspeople can take a week off, safe in the knowledge that everything will run smoothly in their absence. If that’s your long-term aim, consider the steps you’ll take to get there.