Before starting a business, you need to be as certain as possible that your business idea will succeed before you launch. That means, you need to “fail proof” your idea.
Below are three pivotal questions you need to answer to determine if your business idea is viable and likely to succeed. It’s a compact method to test if your idea holds water before you waste the time, energy and money on something that isn’t going to work.
If you can say “yes” to all three of them, you have an idea that will likely do very well.
1. “Is there competition in my space?”
Contrary to people’s belief, you need competitors in your space. If you find a market that’s 100 percent unoccupied, possibilities are that you’re either the first one there or other people have tried unsuccessfully and abandoned the market.
Being the first in a space isn’t really bad, but there’s less of a roadmap to follow.
It is better to work on something that has a high probability of succeeding so that you can build your confidence, business savvy and skill set.
2. “Are my competitors making money?”
It might sound silly, but very important to consider: even if there are people doing what you want to do, you need to make sure they have enough clients and are making the type of money you’d like to make.
There are different ways to know how well your competition is doing. You could look on their website for testimonials and client success stories.
You don’t need to get exact revenue numbers. The point here is just to get a general sense of how well they’re doing. If other businesses are successfully getting clients and customers, so can you.
These step will ensure that it’s worth your time to invest in your idea.
3. “Can I do my product/service differently and make it better?”
You’ve found your competition in your space and they appear to be doing well. The only way your can penetrate such market is if you have a unique product or service.
For customers to patronize your idea, you must show them what makes your product or service better.
If you can show why you’re unique, you’ll attract the right customers for your business and your uniqueness will keep such customers loyal.
This point of difference between you and your competition is called a “Unique Sales Proposition.”