Of course, not all business ideas are innovative or viable. But there are several ways to determine whether it’s an idea you should act on or one you should shelf for a while and allow to evolve into something you can confidently put all of your effort behind at a later stage.
Before taking the plunge and exploring how to get small business funding or formulating a launch plan, try these three methods that will help you to determine your next step.
Your first task will be to determine market demand. You’ll need clear evidence that consumers need or want your product or service and will be willing to pay for it. This is where market research becomes critical.
To figure out whether there is a demand for what you are offering, you could conduct surveys or approach a market research company to facilitate a focus group that will provide you with valuable and objective feedback. You could also run your idea by an industry peer or mentor and ask for their opinion on whether what you are proposing could work, as well as any opportunities and challenges they can predict.
Search engine optimisation tools like Semrush can also help you determine the search volume for keywords related to your proposed offering as well as whether the market you’re wanting to break into is saturated or open to a new approach. When in doubt, use social media listening tools to get an overview of what people are talking about in relation to your industry and whether your product or service can be positioned well enough to fill a gap in the market.
Check your resources
As an entrepreneur, you will need to consolidate all of your resources and leverage them to gain a footing in the marketplace. Without the right amount of support, you won’t be able to sustain consistent growth and get your business passed the first few years, which are often the most challenging.
Once you have a solid business idea, note down which resources you have at your disposal to support you in your journey. This will include your personal resources such as a qualification in the relevant field, your experience in the particular sector, a specific skill set, or an ability to solve problems creatively.
Then, look at your broader resource base and assess whether your network includes people who can offer you valuable advice and guidance, whether you have access to enough working capital, and whether you have industry contacts that can help you get a foot in the door in terms of market access.
Pause and ask the questions that matter
The next step is to ask a few pivotal questions: ‘Does my business solve a problem in a new way? If not, can it solve a problem in a way that is better and more efficient than the existing market players?’ You should be able to answer at least one of these questions with a confident, ‘yes'.
If you are introducing something completely new to the market, your primary job will involve raising awareness, establishing your brand and onboarding your first customers as social proof that your idea works. On the other hand, if you are convinced that you can do a better job than your competitors at solving a problem or meeting a need, your main objective will be to cut through the noise by offering a unique and attractive value proposition that can set you apart and get you the competitive edge you need to win market share.
As an entrepreneur, you will likely review these three areas and revisit these methods as your business grows and as you adapt to the evolving marketplace.