Business ideas are easy. Entrepreneurs can see a dozen opportunities a day if they keep their eyes open and their minds sharp. From parking a car to waiting in line at the coffee shop, anywhere there’s a difficulty or a problem there’s a solution waiting to be monetized.
The challenge is turning that idea from concept to a service.
That takes planning. It takes time and it takes money, too. Coming up with an idea requires only a moment of inspiration. Building a business requires risk, effort and work.
So, when you’re full of good ideas, how can you tell which is the one that will bring you the most success? Which idea is worth making that investment?
Start with the traditional method: turn your business idea into a business plan.
In an age of pitch decks and Powerpoint presentations, that might sound old-fashioned. But creating a business plan, even if it’s only for yourself, forces you to take a hard, objective look at the product you want to create. It tells you what you’ll need to create it.
Of course, you’ll come away with an idea of the amount you’ll need to invest, and the sort of revenues it can bring in. But you’ll also come away with a deeper understanding of the product. The act of describing it will help you to understand what you can build and which features are unlikely to work in practice. And as you look at your market, you’ll come to see both its size and its make-up. Do the ideas include customers you want to spend time with? Are they people you want to help?
Once you’ve created a business plan, you might be able to begin work on the production. Someone hoping to open their own fashion boutique, for example, could start by creating a few pieces and seeing how they sell online or at fairs. Getting that feedback early would be better than investing in a complete store and hoping that people like it enough to tell their friends and return regularly.
Outlets like Etsy and Ebay offer easy ways to reach and test a market once the marketing is right. You can even create a Facebook page, start building followers, and use their comments to find out whether the interest you thought you’d generate is there.
There is a difference though between saying that a product is good and actually willing to part with cash for it. That’s why some businesses use crowdfunding sites not just to raise funds to pay for production but to market-test interest in their product. If people are willing to pay in advance to help a business create a product that they find interesting—whether that’s a new kind of drone or an origami folding kayak—that’s a great sign that that other people will pay to own it too.
The success of a crowdfunding campaign often has as much to do with the quality of the campaign as the product itself though, so again, you’ll have to put in effort to get a reliable result. But if you meet the threshold you’ll have both a proven idea and enough funds to get you at least past the first stage of production.
None of this will happen quickly. A business plan might take you a month or more to research properly and put together. Building a prototype and taking your first steps into the market could take you months more and give you the kind of feedback you really didn’t want to hear. Even a crowdfunding campaign now relies on creating both a version of the product and shooting a professional-looking campaign video… then promoting both with press releases and on social media.
Which is why doing all of that brings you to the most important test of your business idea. If, after writing a business plan, building samples, and pitching to a market, you still love the idea and still believe you’ll enjoy creating it, you know you’ve picked a good idea.
If your business idea is fun to develop, your customers will have fun using it. That’s how you know you’ve found the right business idea.
About Joel Comm
As an Internet pioneer, Joel has been creating profitable websites, software, products and helping entrepreneurs succeed since 1995. He has been at the frontlines of live video online since 2008 and has a deep expertise in using tools such as Facebook Live, Periscope, Instagram or Snapchat to broadcast a clearly defined message to a receptive audience or leveraging the power of webinar and meeting technologies.
Joel is a New York Times best-selling author of 15 books, including “The AdSense Code,” “Click Here to Order: Stories from the World’s Most Successful Entrepreneurs,” “KaChing: How to Run an Online Business that Pays and Pays and Twitter Power 3.0.” He is Co-Host of The Bad Crypto Podcast one of the top crypto-related shows in the world and has spoken before thousands of people around the world and seeks to inspire, equip and entertain.
Bank of America, N.A. engages with Joel Comm to provide informational materials for your discussion or review purposes only. Joel Comm is a registered trademark, used pursuant to license. The third parties within articles are used under license from Joel Comm. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.