For a certain breed of entrepreneurially-minded people, coming up with new business ideas is like a never-ending parlor game. They come to you at the grocery store, in the shower and over dinner. You start way too many sentences with the phrase, “I have a business idea.” You even get annoyed (like, really annoyed) when you see someone else having success with a business idea you’ve already thought of, but never managed to start.
The problem with business ideas is that you can think of hundreds of them, but choosing just one to focus on can be a real challenge. It’s like picking a name for a baby. There are many you might like, but after ruling out the ones fraught with perilous nickname potential, the ones that remind you of your ex (or worse yet, your spouse’s ex) and the ones that will sound silly 20 years from now, you’re left with fewer options than you thought.
Choosing a business idea requires the same kind of thorough vetting. Will your business idea be viable a year from now? Is there too much competition? Are you in love with the idea of running this particular business, but not with the reality of what it entails?
When trying to settle on the business idea that’s right for you, there are four key questions to ask yourself.
Question 1: Does your customer exist?
So, you want to open a vegan restaurant that caters to kids. You love cooking. You love kids. And, hey, it’s green, right? Right. Except for one small thing: There might not be enough vegan kids hanging around your town to make your idea viable. Then again, who knows — there just might be. It’s essential that you don’t get so caught up in your own interests that you turn a blind eye to the truth about who and where your audience is. Instead, once you’ve got a good business idea in mind, work on figuring out if it will fly with a big enough customer base to support your long-term survival and growth. [Read: How to Figure Out Who Your Customers Are]
Question 2: Will your business idea still be relevant in a few years?
Sure, anyone could sell snow shovels in a blizzard or umbrellas in a rainstorm, but what’s next? If your business idea is too focused on the here and now, it might not have the potential to survive and thrive. The trick is to determine whether your business idea taps into a core need or desire that has some staying power. And, perhaps more importantly, you’ll need to determine if your business idea has enough flexibility to grow and adapt over time. With enough research and market observation, you’ll be able to get a good idea of your business idea’s long-term potential. [Read: 10 Ways to Know If You’ve Got a Good Business Idea]
Question 3: Do you really want to run this business?
What could possibly sound like more fun than running a cupcake business? Pink frosting. Happy customers. Birthday parties. But, wait, doesn’t someone have to bake those cupcakes at 3 o’clock every morning? And what about the health inspectors? Finding employees who want to work in a hot kitchen in the middle of summer isn’t easy, either. Rarely does any business idea turn out to be exactly what you thought it would be.
Before embarking on any business, a smart entrepreneur knows to take a good, hard look at what it really entails. Get a job working for someone else who does what you want to do. Or, at the very least, map out each process your business will perform to understand exactly what kind of work you’ll be doing. Figuring out that it might not be a good fit for you will save you a lot of money and heartache later. [Read: 10 Personality Traits You Need to Start a Business]
Question 4: Who is your competition (and does it matter)?
In my town, there’s a pizza place on nearly every corner. How could a one-square-mile town support no fewer than six pizza places? I have no idea, but somehow, it does. Everyone has their favorite and loyalties are fierce. Pizza, it seems, is one business where competition doesn’t prevent upstarts from staking their claim on a piece of the pie, so to speak. Can the same be said of your business idea? Just how many toy stores can your town support? Or pre-schools? Or green cleaning businesses? Make sure you assess the competition and find out if you can offer something different, better or less expensive before you proceed with your business idea. [Read: Advice for Toppling the Giant in Your Industry]
Once you’ve asked yourself these four questions and found that you’re satisfied with the answers, it’s time to get started on putting together a solid business plan. Until then, if you’re looking for great business ideas, check out the hundreds we’ve researched in Business News Daily’s Business Idea Center.