How to Know When to Invest in or Trash a Business Idea
Business ideas are a dime a dozen, but very few ever get the wings to take off and succeed. This is due to a multitude of reasons, including initial funding, management, competition, location, and sheer timing. Sometimes, however, the idea simply isn’t good enough, and that’s when you have to know whether or not to pull the plug and trash it.
What makes a good business idea good in the first place? That’s what we’re going to be looking at here.
Part of the process of becoming a successful entrepreneur is knowing when to let go and move onto another project. Far too often people get stuck in ruts and complain that nothing is happening for them, when their own stubbornness is keeping them from seeing that their initial foundation is weak and doesn’t have the power to give them any traction.
A poor business idea will cost you more money than a failed business idea. At least with the latter, it’s done and over with and you can learn from your mistakes. If you continue to support a bad choice or lukewarm idea, it’s going to keep you from better things. This is one of the problems plaguing many digital entrepreneurs, for instance. Too many lukewarm ideas are keeping you from real success.
A Good Business Idea Addresses a Need
Stop and take stock of your idea or product. Does it address an intimidate or pressing need? And I’m not referring to merely a “use.” There’s a difference.
For example, those TV infomercials that attempt to sell you a bunch of bizarre home contraptions are a perfect example of products with “uses.” They don’t actually address needs, they are just useful for one or two particular things, and might not even be “that” useful.
Just because you can actually “use” a product or idea doesn’t mean people will, or even should.
No one is going to go out of their way to buy some strange egg-dicer machine or a three-in-one spork-knife-bottle-opener, yet these kinds of stupid ideas are all over the snake-oil pit of home shopping networks and chintzy department stores. Yes, a few rubes buy them, but ultimately, these silly things flop because they don’t address a need, they merely provide a “use,” and that’s not good enough.The last thing you want to do is sink money into a product or service that doesn’t address a need, you’re only going to lose more money.
In order for your business or idea to truly hit home and connect with people, it has to address a need. This is the foundation, possibly one of the most important parts of starting any kind of business or product. Does it actually help people accomplish something they need to get done in an efficient, easy, time-effective, and cost-effective manner? That’s all you need to ask yourself at this point. If it doesn’t you’re not starting off on the right foot and you’re only dooming yourself for future failure.
Not every silly or “innovative” idea has its place in the free market. Every niche is over-saturated and there are more products and ideas floating around than ever before. If your product doesn’t focus in on something needed, it’s ultimately going to get buried.
A Good Business Idea Comes in a Unique Package
What sets your business or idea apart from someone else’s? What will draw people to your option and only your option?
There’s not much new under the sun. It’s hard to come up with a wholly unique solution to address needs – oftentimes, the solutions business owners provide, as well as their products, are just better or more sophisticated versions of products and solutions that have come before them. Business is a world of piggybacking and learning from others about what does and does not work.
That being said, in order to actually create a brand and a product people will trust and look for, your solutions and ideas need to be packaged uniquely. What sets your business apart from everyone else’s? If what you’re selling can be found right down the block at another business just inside a different package, you don’t have a product.
You need to provide something that people can’t get anywhere else. Whether this is in your customer support, your social media outreach, amenities that are offered at your store, atmosphere, fun branding, community outreach, or mission, your business needs to have its own identity and needs to package its solutions in a way no one else does, otherwise someone at any time could come along and pull the rug right out from under you.
In other words, you shouldn’t be afraid of competition or someone stealing your product or ideas. Whenever someone comes to me and inquires at length about things like copyright, patents, anti-text theft programs for their websites, and things of that nature, my first thought is always: what makes you think you have something that can be legally protected or worth stealing in the first place?
You’d be surprised how many people think they have found the next golden ticket, a business idea so novel that everyone is going to be lining up in the shadows to try and steal their ideas and run away with the gold that is rightfully theirs.
This is not the reality of entrepreneurship and business. Your idea is not novel, trust me. A hundred people are already making the same foods, growing the same flowers, fixing the same pipes, drilling the same teeth, reading the same law books, teaching the same classes, and selling the same cars. Yes, you must address a need, but there are only so many needs. It’s how you package your business and the totality of your brand, that’s what becomes your intellectual property.
You have a huge problem if you believe your business could be destroyed if Joe Shmoe down the street copied your business model and did it too. NEVER fear competition. The business world will eat you alive. Instead, focus on packaging your business in a way no one else can, because the business and you are one. You share an identity, you are the one connecting with customers and providing services, and your unique brand message is speaking through your products and marketing.
Then nothing can take you down, because your business becomes more than the sum of its parts.
A Good Business Will Have People Coming Back
The hallmark of a bad business model is one that can’t generate repeat business. Sure someone might scoop your product up once in a while, but what are you doing to retain that customer and establish a connection with them?
If your business doesn’t have any means of securing customers for the long term then it is bound to falter. A good business or idea should, at its heart, aim to provide some kind of ongoing experience, not just a product.
Even if the reason people keep coming back is not a product, but more intangible (feel-good vibes, customer service, association with green energy, know the owners on a personal level, etc.), that’s all you need. You have to get in the mindset that you are selling more than a product or service, you are selling an experience to people. If the experience is a good one, people will keep coming back. Sometimes they will even come back for the intangibles alone, not even the product in question.
When crafting your business model or idea, strive to think about how you will serve your customers in the long run. What will draw them to you and what will then keep them returning time and time again? This is where email re-targeting, calculated marketing, being available for clients (good customer service) and the like comes in. You’re not going to magically create return business – this is something you really have to cultivate, unless you are a local restaurant that just happens to serve the absolute best food of a certain type in a 30 mile radius. Then you will repeat business even if the head chef is a jerk and you do no marketing – people will do your marketing for you with word of mouth.
Most businesses however can’t thrive on that kind of a model. And some live and die by that kind of thing, because tastes change and food trends die out. Statistically, less people are eating out anyway, as more people discover the benefits of home-cooked, organic, vegan, and other healthy food options. So that kind of food service word of mouth stuff will only be around for so long.
It’s much more beneficial to invest in a business philosophy that serves your customers and clients wholly. You’re not just trying to push a product. You’re offering them an experience.
Crafting a Sound Business Model From the Ground Up
Your product might be awesome and you may have great people skills, but these aren’t guarantees that you will succeed in the business world. You need to address the points listed above and start with a solid foundation. If these points aren’t present in your current business model, it’s likely you either need to trash it and start from scratch, or give your business model a major makeover at the very least.
The market is more saturated than ever, business competition is at crazy record highs, and everyone it seems has their own little side hustle or part-time business of their own. You have to compete with all of that, and you’re not going to get it done by leaving everything to chance or riding the wave of a good product idea.
Take the time to really analyze what your business or service can do for others and take stock of yourself. How can you connect with your clients and create an experience that goes above and beyond merely selling a product? What can you do to separate yourself from the herd and stand out? How can you incrementally improve your business model to double revenues?
If you need assistance with this kind of thing, invest in a good business or lifestyle coach. Get advise on the direction your business should take, how you should communicate, the social media platforms you need, and how much resources you should be allotting to marketing.
These kinds of background things often get lost in the madness of running a business, but they can’t afford to be overlooked. You’re only going to harm your chances at being successful.
If you’re looking to get in touch with someone who can jump-start your business idea and keep it from failing, send me a message anytime. Setting your ideas on the right path, with a strong foundation, is what you need to ensure the longevity of your business.