How Good Is Your Big Idea

Q: I want to start my own business. I have tons of business ideas that all sound great to me, but my husband is not so sure. He says that we need to figure out a way to test my ideas to pick the one that has the best chance of succeeding. I'm ready to just pick one and go for it. What is the best way to determine if a business idea really is as good as it sounds?-- Hannah C.

A: Heather, I know you probably don't want to hear this, but your husband is right (first time for everything, huh): before you just pick a business idea and go for it you should test the feasibility of your ideas to make sure they really are as good as you think they are.

Every business idea, no matter how good it sounds while bouncing around inside your head, should be put to the test before you invest time and money into its execution. Success lies not in what you think of your idea, but what the buying public will think. Many entrepreneurs find out too late that the public's opinion of their idea differs greatly from their own. Wasted time and money aside, the last thing you want to do is hear "I told you so!" from your husband, so take a deep breath, slow down, and let's look at the ways you can test the feasibility of your idea.

There are many ways to test an idea's feasibility, though some ways are not nearly as effective or accurate than others. Most people start out by asking everyone they know what they think of their big idea. This is a good way to start the wheels turning because you may get feedback that you have not considered before, but be warned: this is NOT the best way to test the true feasibility of an idea. Never start a business simply based on what your friends and family think.

There are two things that will happen here. First, your mother will tell you what you want to hear and your best friends will be equally kind. No one who really cares for you will want to rain on your parade no matter how insane your parade might be, so take the wisdom you gain here with a hug and a grain of salt.

On the flip side, your coworkers and casual acquaintances will probably tell you the opposite of what they really think. If they think your idea stinks they'll tell you it's great and if they think your idea is great they'll tell you it stinks. Please don't preach to me about human kindness. Human kindness is often bested by human nature and we humans, by nature, are an envious lot. We hate to see anyone doing better than we are doing and we hate to see anyone who has the potential to leave us behind. Go watch the movie "Envy" and consider this: why would someone who is broke or stuck in dead-end job with no other prospects want to see you succeed? They wouldn't. End of story.

Instead of conferring with friends and family you should run your idea past a number of neutral third parties who are knowledgeable about business and will give you an honest opinion. Contact the local Small Business Administration (SBA) or The Service Corps of Retired Executives (SCORE) offices and ask to speak with someone knowledgeable who has time to listen to your idea (don't run it past the receptionist). Or speak with the small business liaison at the Chamber of Commerce. Or seek out a successful entrepreneur who is willing to listen and give you an honest opinion about your idea. Just remember, opinions are like belly buttons: everybody has one and they are all different.

A more accurate way to judge the feasibility of an idea is to create a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis will not only help you gauge the feasibility of your idea, but also help you build on your idea's strengths, identify and correct the weaknesses, and spot ways to take advantage of potential opportunities while avoiding potential threats.

Here's how to perform a simple SWOT Analysis. On a piece of paper draw a vertical line down the center of the page. Then draw a horizontal line through the center of the vertical line. The paper is now divided into four quadrants. Label the upper left quadrant "Strengths." Label the upper right quadrant "Weaknesses." Label the lower left quadrant "Opportunities" and the lower right quadrant "Threats."

Now fill in each quadrant based on what you see as the strengths, weaknesses, opportunities and threats of your business idea. You should repeat this process for every idea you have and each quadrant should have something written in. If you can think of no strengths, weaknesses, opportunities, and threats for a particular idea, that means that you do not have enough information to complete the SWOT analysis, which means you also do not have enough information to effectively execute that idea.

Strengths are those things that make your idea a strong one. Strengths can be personal or product-oriented and may include: prior business experience and success; sufficient funding to start the business; having a customer in hand; having a unique product or service to offer; having an established market; etc.

Next list all of the weaknesses of your idea. It is important that you are honest with yourself and list as many weaknesses as you can. Don't pretend that your idea doesn't have any weaknesses because every idea does. You will hurt no one but yourself if you pretend that your idea is bulletproof. Weaknesses might include: lack of capital to start the business; lack of business or management experience; a crowded market place; large competitors; etc.

Opportunities are those things that you can tap into that might fast track your business idea. We've talked about opportunities before and how smart entrepreneurs seek out new opportunities rather than waiting for opportunities to come to them. Opportunities might include: a potential partnership with someone who sells products in the same market; a prime storefront location that is coming available; a competitor going out of business, leaving a hole in the market that may be right for you; etc.

Threats are those things that threaten the success of your business idea. Threats might include: uncertain marketplace conditions; strong competitors in the market with lower prices; possible laws or taxes that may impact your idea; etc. Like weaknesses, it is vital that you are honest when it comes to identifying threats.

Once you have filled in all four quadrants, you should have enough information to begin testing the feasibility of your idea. Do the strengths of your idea outweigh the weaknesses or do the weaknesses outweigh the strengths? Are the opportunities available to you ample or nonexistent? Are the threats many or few?

With this information in hand, you can move on to the most accurate method of testing your idea and that is the creation of a detailed feasibility plan, which we will discuss next time.

Here's to your success!

Tim Knox

Small Business Q&A is written by veteran entrepreneur and syndicated columnist, Tim Knox. Tim serves as the president and CEO of three successful technology companies and is the founder of DropshipWholesale.net, an online organization dedicated to the success of online and eBay entrepreneurs.

RELATED ARTICLES

What Makes a Person an Entrepreneur?
Entrepreneurship is generally characterized by some type of innovation, a significant investment, and a strategy that values expansion. The entrepreneur is often quite different in mindset from a manager, who is generally charged with using existing resources to make an existing business run well. The roles of entrepreneur and manager are not necessarily incompatible, but entrepreneurs are seldom patient enough to be good managers.

Empathy - Not Business Plans - Key to Your Home Based Business Success - Do You Have Empathy?
EMPATHY is a Natural Talent, you were born with it and you will never loose it. It can be a blessing or a curse in a home based business. If you develop it, it can make you a Millionaire. Mary Kay, of Mary Kay cosmetics, did just that. If you have it, it is your most important key to a successful home based business. Business plans, cash flow projections, marketing analysis, etc. are skills that are needed in a home based business, but they can be learned from a workshops, courses or books. Your Natural Talent is what gives you the competitive edge.

Entrepreneurship: What does it REALLY mean?
Introduction:

Bring That Difference To Your Business!
Romans had a phrase for this- First among Equals.

Franchises-Exit Strategy
At an International Franchising Symposium in London, Peter Holt made the bold statement to his audience of Franchisors that they needed to understand that their business would fail, and in fact all businesses are bound for failure. Needless to say, there were a few shocked faces in the crowd. He was making the point that it really is just a matter of the number of calendar flips before time strangles any business. It's a hard point to argue when you think that the Neanderthal Fortune 100 included Barney's Dinosaur Obedience School. Not a lot of money in that these days.

Boundary Setting 101 for Solo Entrepreneurs
Select the best response to the statement below:

Business Ideas
Richard Branson, billionaire founder of Virgin Records and Virgin Atlantic Airlines, may be better known for his efforts to circle the globe in a hot-air balloon than for his business successes. He suggests that "Being an adventurer and an entrepreneur are similar? You're willing to go where most people won't dare."

Coating Service Business Case Study
There are many coating businesses in the market today, but have you ever asked yourself how one gets into this line of work? How they are formed or what prompts someone or some entrepreneur to go out and start a business to fill this niche? Well this is an interesting case study that shows how we became interested in this industry from a sub market of the coating business; Spray in Bed Liners. Our company is in the auto detailing business, www.detailguys.com and we often service auto dealerships. Our customers need service for spray in bed liners for the pick-up trucks they sell. So we looked around at all the possible Biz Op companies doing this and the franchises too.

How to Become a Successful Entrepreneur on the Web
Becoming a successful entrepreneur in the online world is no different than becoming a successful entrepreneur in the brick-and-mortar world. Both tasks require vision, determination, and hard work.

Business Startup Checklist
Use this comprehensive checklist to plan each step of your new business and transform your dream of entrepreneurship into reality. These steps may not necessarily be completed in the order listed, however, you can use them as a guideline for completing all of the necessary business startup tasks.

From Employee to Entrepreneur: Taking the Plunge
Before you decide whether or not running your own business is right for you, start by pinpointing your area of expertise and assessing your aptitude for business.

Abstract Business Marketing Strategy for the Entrepreneur
If you look at those Corporations in franchising today you see the great companies that use these systems to move markets and deliver products and services to America. Franchising is obviously a power play in the marketing strategy game book. General Motors uses the franchise system or special teams, dealerships, to move their products in each market. Now take your mind to the "Family and friends Program" in Telecom, that is still being done by all those selling mobile communications. Think of some of the ways hyper type marketing has been done in so many areas and market sectors with so many different niches or market segments. Think of the new term appropriately named as viral marketing thru the use of ezines, forwarding emails and adhoc networks of friends and acquaintances within one's email box. Look at the organic evolution of a real virus and how it gets what it needs within your body; virus vector modeling is fascinating as it is so close to grass roots political campaigns, referral marketing or Internet link exchanges.

Do You Have What it Takes to be a Successful Entrepreneur?
Print off this page, take the quiz and find out if you've got what it takes! See the scale at the bottom to mark yourself.

Go Slow to Go Fast - Why Over 80% Of High Tech Startups Fail And What To Do About It
With billions of dollars of venture capital residing down the street on Sand Hill Road, two Stanford professors are attempting to answer a fundamental question "why does it always take longer and cost more to build a hi-tech company than anyone ever expects?" For all the intellect, experience and graduate degrees in the venture capital industry, the sad truth is that 80% of venture capital investments do not pan out. While the reasons for this high attrition rate are too numerous to list here, a simple fact defines every successful investment - the company figures out how to bring in more money than it spends. The secret to solving this fundamental equation these two professors believe lies in the Sales Learning Curve.

Online Women Entrepreneurs Need To Pace Themselves
Saving time means pacing yourself, being organized, and always prioritizing your duties, responsibilities and efforts.

Beware the Opposition!
Any time you make changes in your life you are going to be met with opposition from people who would prefer you to stay exactly as you are. Sadly, these people are often the ones that love you the most; your family, friends, partners and even work colleagues. However, in your moments of entrepreneurial seizure, the greatest opposition that you will experience (particularly if you're a seasoned employee) will come from within yourself.

Why Every Student Should Start a Business
With the economic downturn, students in all the major business schools have been dropping out of their entrepreneurship classes and transferring back to classes where they think they have a secure future. Students and professionals who were once planning to start businesses now have decided to go back to their cushy jobs. Everything is going back to normal. Or at least that is how it looks. Below are nine reasons why any student should start a business:You gain experience. Owning and running your own business is an incredible way to gain experience and credentials regardless of whether you decide to stay in business once you graduate. Jaime Gonzalez of Oklahoma State University received the highest job offer in his entire graduating class. Now, there are two kickers: First, he was the founder of an IT consulting company, and second, he had a 2.4 GPA. Hmmm...I wonder if starting a business helps in getting a better job when you graduate? You have nothing to lose. I think it's safe to say that most students dip into their parents' checkbook when it comes time to pay the bills. In general, students aren't paying child support, rent, utilities and many other expenses. The worst thing that could happen if your business fails is that you get a job, have an incredible credential on your resume, and have experience that will increase your chances of success in the future. The best thing that can happen is that you'll become the next Microsoft. I don't know about you, but I think that is better than choosing between no job and jobs that you're in just for the money. Two-thirds of millionaires are entrepreneurs, according to Thomas Stanley and William Dank, authors of The Millionaire Mind. If it's the money you want, then consider entrepreneurship. You receive not only a salary, but also a lot of money if you're lucky enough to sell your company or take it public. Michael Furdyk, a successful young entrepreneur, was able to sell his business, MyDesktop.com, for $1 million when he was 16 years old! You develop networking skills. You've likely heard that your network increases your net worth. Consider the fact that by running a business and constantly being in a business community, you will develop excellent contacts. If you choose to get a job after you graduate, you will have a great pool of people who will be more than happy to hire you or send your resume to somebody who wants to. You increase your value. Put simply, starting a business in college increases the value of "the brand called you" and gives you more options. For example, an entrepreneur with a large brand value can publish a book, star in a documentary movie (i.e., Startup.com), or go straight to the top of another company. I recently met one of the founders of Diversity Planet, a job site for minorities. He spent a year working very hard on the company and has since left to take a reporting job with Dateline NBC at the ripe age of 20! People don't often don't get an opportunity like that until they are much older. Operating a profitable business in the long term is less risky than being an employee in the long term. For example, just look at the recent economic downturn. Tens of thousands of people have been laid off. I can guarantee the owners of profitable businesses are still with the business. They will be the last people to go down with a ship. Business owners can have multiple streams of incomes from different customers. If you're an employee, you only have one stream of income and therefore are bearing more risk. You will learn more about yourself and what they don't teach or prepare you for in school. Furthermore, entrepreneurship is the combination of all the disciplines of business. It includes knowledge of marketing, accounting, management and operations. Already having knowledge of these topics before you take classes on them allows you to see more clearly how everything applies. Also, you will be able to learn early-on what subjects you like so you can make better decisions on what to major in and what industries to target. It is yours. You make the rules, create your own hours, work from wherever you want and choose who you want to work with. You can also pick what interests you the most in the world and then start a business that is related to that topic in some way. If you like art, you can start a design business. If you like marketing, you can create or choose a product and then market it. If you like writing, you can write a book and do your own public relations and marketing. If you like the Internet, you can start a Web development business. You'll grow. I personally have grown a lot from owning a business. I used to be terrified to speak in front of others. Now I look forward to it. Before owning a business, I had probably read a total of five books outside of school, and I only read them because my mom made me. Since starting my business, I've probably read more than 100 books. The business has also allowed me to learn more about myself. I know that I will be an entrepreneur forever in some way, shape or form!

Selecting a Venture
The basic rule is simple: "Find a market need and fill it!" The process of finding the need, and the method chosen to fill it are where the difficulties arise.

Business Planning Overview
The successful entrepreneur is generally more inclined, once a business idea is selected, to sharpen the concept by a detailed planning process. The result of this step is a comprehensive business plan, with its major components being the marketing "mix," the strategic plan, operational and logistical structures, and the financial proposal. The purpose of the business plan is to recognize and define a business opportunity, describe how that opportunity will be seized by the management team, and to demonstrate that the business is feasible and worth the effort.

Raising Entrepreneurs: What to Do When Your Kid is Born to Think Differently
Adolescence brings with it many challenges ? for both parents and kids. Young people, still new to the world, are embarking on a journey to discover their passions, joys, and authentic self-images. More often than not, however, their journey more closely resembles an elongated stampede of enraged elephants than it does an innocent soul-searching endeavor. But no one said growing up would be easy.

home | site map | www.1001topwords.com