Choosing a business idea is easy; anyone can do it. Choosing the ‘right’ idea is often the tricky part.
A business idea is like a shoe. If an entrepreneur with the wrong foot size tries to take it on, it may end up a horrible experience.
Most times, new businesses fail because the ideas and entrepreneurs behind them are the wrong fit. This article provides you with a checklist of five basic rules you should use to test that great business idea you’ve been considering.
The rules you’re about to read are common sense rules that will guide you through the process of choosing the business idea that is right for you. You must be careful to be very objective and truthful to yourself in answering these questions. You can fool everybody else, but it’ll be a shame if you fooled yourself and chose a business that didn’t pass these tests.
Now that we’re clear on the ground rules, let’s see what this checklist looks like!
1. Does the business idea stir up a passion in you?
Humans are creatures of emotion, more so in the world of business. Our mind is a complex machine that can be brought to amazing action by strong feelings.
Passion is the defining quality of entrepreneurship that breeds positivity, ambition and perseverance – the critical nutrients that will nurture any business idea to become a remarkable success.
Most people start a business and focus too much on the money that can be made. While we insist focusing on the money isn’t totally bad, focusing ‘too much’ on it is!
Very few businesses start making money almost immediately. Just like a baby, a new business needs to be taken care of until it can stand on its feet. Depending on the kind of business you are considering, this may take anything from 6 months to 5 years!
Do you have the patience, passion and belief to wait for your ‘baby’ to mature despite all the challenges you will be facing? The world of business is tough, and this is why almost 9 out of every 10 new businesses fail in their first year.
For a business that won’t make you any money immediately, you must love and enjoy it enough to stick with it while the road is rough and the money isn’t coming.
Will you have enough passion to still believe in the business when you run into financial trouble? Will you love it enough to not be bored two years down the line? Is there some sort of strong connection you have with the idea you find hard to explain?
2. Can you apply your knowledge and natural abilities to the business idea?
The best business ideas are those that can gain from your knowledge or natural abilities in the concerned area.
If you love to write, for example, becoming a blogger or running a content website will come very easy to you. Africans like Linda Ikeji have become financially successful doing things they ordinarily love to do.
In a previous article, 3 Guaranteed ways to find business ideas in Africa, we identified how your knowledge and natural abilities can be converted into a successful business. Almost everyone has some special skill or basic knowledge that can be made into a business.
If you already have a gardening hobby, turning it into an urban vegetable farming business will not change your love or dedication to it. Plus, you’ll be getting paid for it!
At the early stage of your business, you will likely be responsible for a lot of all the ‘technical’ tasks. You may be involved in producing or providing the product. You will also have to convince people to buy what you’re selling and deal with enquiries and complaints.
Do you have great organization and presentation skills? Are you a good leader? Are you uncomfortable dealing with people? The great thing about this rule is, anyone can learn the skills and acquire the knowledge if they’re interested.
Because you are great (or terrible) at these things will not guarantee the success or failure of your business idea. If you are willing to learn and improve on the knowledge and abilities you already have, it will be a great thing for your business.
The more the business idea fits your abilities, knowledge and temperament, the better!
3. Does the business idea suit your risk appetite?
Some business ideas are riskier than others. It’s usually safe to bite only as much as you can swallow. How large (or small) is your appetite for risk? How much of your physical and financial resources are you willing to bet on your business idea?
Risk is not totally a bad thing. After all, entrepreneurs are different people because they are willing to take a risk to achieve a return. So, risk is not the problem.
The problem is knowing how much of it you’re taking on. Most entrepreneurs are often too distracted by the profitability of a business idea and do not take the time to consider the risks involved.
There are ways to avoid, transfer or reduce the effects of the risks that will come with your business. This is where a good business plan comes in.
A good business plan allows you to analyse all the possible trouble spots and properly identify the risks in the business idea.
Knowing most of the risks before you launch the business gives you a level of comfort compared to flying blind and hoping nothing goes wrong. And if after your analysis, you are convinced the risks are high (or low) enough for your appetite, you may have a winning business idea on your hands!
4. Are you in for the long or short term?
Why do you really want to start this business? Are you desperate for extra bucks and need to start a business to supplement your current income? Or is the business part of your long term plan to become financially independent and secure?
All businesses are not the same. Some may need long incubation periods before they become successful while some others are instant successes. An entrepreneur with a short term expectation is bound to be impatient and may not nurture the business well enough to reap the benefits.
Even Facebook had to wait a full five years before it started making any money. You need to be sure you can wait for the rain to come!
Your long or short term expectation will surely affect how you deal with your business. A long term view is likely to lead to a patient and supportive attitude towards the business.
While a short term view would most definitely starve the business of the attention and resources it needs to pull through. A new business that becomes your personal ATM may not last very long.
5. Are you inspired to take action?
Business ideas will remain ideas until someone takes action. Anyone can have an idea. You can be sure most of the successful businesses around us today were not started by the person who first got the idea.
A business idea is no use inside your head until you bring it to life. Even if it passed the first four tests in this article, the idea still won’t be yours anymore if someone else beats you to it. You have to be inspired enough to start doing something about the idea. And fast!
The best business ideas will likely not come to you in a flash. There may be a lot of trial and error involved. If one doesn’t work for you, don’t be discouraged to try another one. Most times, refining the first idea could lead to a totally different one that would eventually become a real business.
Given the rewards that come with owning your own business, it’s totally worth all the pain it takes to find a great business idea. You could choose from several business ideas on this website and see what you can learn from the types of businesses that made these entrepreneurs successful.
We’re sure you wont regret it!
To your success!