For many people, trying to decide if an entrepreneurial venture is worth pursuing is like standing at the edge of a high dive- they question if they should dive right in, or climb back down. The harsh reality is that many failed business ventures began and ended as an idea that needed a little more thought, and a little refining. Before plummeting off the high dive and falling in to the unknown, there are several questions you will need to ask yourself in order to prevent a painful belly flop, and dive into success.
#1. Is there a need for this product or service? You want to create a business that makes life easier or more enjoyable for people, so make sure your business concept is serving the need of someone, or some group. There is no point creating something that people don’t need, because ultimately, if people don’t need (or want) it, they won’t spend money on it.
#2. Is there a customer segment for your product or service? People often think they know exactly what their customers want, but rarely take the time to talk to them and find out what they really care about. Your business doesn’t need to serve everyone, but make sure it will serve a segment of people who legitimately see the value in what you’re selling, and are able to purchase it. Once you establish there is a customer base for your business, you can start learning more about them and refining your business to appeal even closer to their needs.
#3. Are you operating in a “blue ocean”? Picture an ocean with sharks in a feeding frenzy over a small school of fish- that’s not where you want to start your business. If there are lots of other people or companies that are doing the same thing as you (or something similar) and selling to the same customers you are chasing, you are in a “red ocean”. Make sure your idea is different enough, or catering to a different customer segment, so that you can begin your company in a clear “blue ocean”, with little to no competition targeting the customers you want.
#4. Is this idea profitable? It’s critical to have a well thought out revenue stream for your business, and realistic goals and projections. Being profitable immediately isn’t necessary, as most businesses start out (and remain) in debt for a long time. However, if you can’t see the opportunity to shift out of the red and into the black in a reasonable timeframe, you may want to rethink that business opportunity.
#5. Do you have the skills, resources, and ability to get started? Be very honest with yourself regarding your personal skills and strengths. Are they aligned with this business concept? Are you knowledgeable enough about the industry, clientele, and start-up process to feel confident getting off the ground? Often times, extensive research is required, even for experts, to position the business for a decent start. Also, be realistic about the financial requirements of the start-up and maintenance of your venture. Are you in a position to take the necessary financial risks? If not, are you able to acquire the funds through other avenues?
#6. Are you management material? Even if you don’t want to be the President or CEO of your company, it will take a great deal of leadership and management skills to get your idea off the ground. You will need to be able to delegate tasks to your team, network with the appropriate people, seek out and secure necessary resources, etc. It takes tons of time, effort, teamwork, and devotion- make sure you can handle it.
In my other article, “Why you Should Start-Up, Starting Today!”, I encourage hopeful entrepreneurs to follow their dreams. I continue to support small businesses and start-ups, but I also encourage a well thought-out idea, and a meticulously crafted business plan prior to diving in. If you find yourself saying “yes” to the questions mentioned above, it may be time to step onto the diving board and take the plunge!
To see more posts from Breanna Bremer, please view her article library here.