Will my business survive? Take the 36 hour test
Published 18/06/2014 | 07:28
LIVING in the Google age means the temptation to take to the internet to assess whether your business idea is a good one or not is always there.
But that is not enough and you need to test the market and talk to people during the research stage.
One of the main reasons start up companies fail is because they did not take the time to weigh up their business idea fully. What may be a promising business in Germany or Japan may not translate well in Ireland but the only way you're going to discover this is by doing your homework.
So what can you do to avoid the unpleasant experience of waking up to discover the business you've pumped your life savings in to is a dead duck? The first thing is to shut down the computer and draft up some questions and talk to those around you - your mother, brother, aunt, the parish priest, anyone who will give you their time. Talk, ask questions, probe, and don't take it personally, if someone tells you your idea is the worst they have ever heard just remember, business is not personal! Be careful, friends and family may not want to hurt your feelings so ask them to be brutally honest with you.
To get started, here is a list of questions that you will need to have answered at the end of your 36 hours of research;
Is there a market for my idea?
The market should be ready for your idea already or in the near future. Sometimes those first into the market don’t make the money, those who copy do
Will it solve a problem and if so will people pay for my solutiions?
Is it really a pain I want to cure, or a "nice to have"?
Will it make the customer more productive, or save them money. What is the return on their investment??
If this service or product was available would you buy it yourself....REALLY!?
Ideas which come to market and fail are caused by people thinking there is a need for their service or product it when there isn't!
Is your market too niche - how many people will your product/service appeal to?
If your business idea is aimed at females over 65 who cycle a Raleigh bike, you need to seriously question if this is really the next big idea that the world has been waiting for!? Niche ideas are good, particularly when you are selling B2B but be mindful of being too niche.
Will they buy just once or many times?
You want to find something that can be bought or used over and over again - this will make for a Profitable and Investor Ready Business.
What can I sell my service or product?
If something is costing you more to produce then you can sell it for then you will go bust before your business even takes off.
Will the profits from the business justify the risk you are taking?
This is when you decide if Entrepreneurship is for you and you’re family. Can you put up with having little or no income while you're getting your business off the ground? It can take years to see a real return but if you've done your work then you can be more confident that your big payday will arrive sooner rather than later.
These basic questions will decide if your business idea is worth researching further. From here you will either tear up your findings or they will become the foundation of your new business. The next step is the planning stage where you test your idea on paper and finally decide if you should start your business, raise finance if required, and join the Next Generation of Entrepreneurs in Ireland.
Paul Healy is General Manager of the Rubicon Centre, one of Ireland’s largest Incubation Centre; http://www.rubiconcentre.ie/