If you want to start a new business, tens of ideas will cross your mind. The internet has hundreds of suggestions of the best business ideas. Unfortunately, nobody buys into raw ideas. You have to transform the idea in your mind into a successful business.
You must evaluate your idea critically before investing your money or asking others to invest in it. How do you determine if your business idea is viable or not? Here is a guide on how to develop a winning business idea.
1. Create a product or service that solves a problem
The first step is to come up with a unique product or service that solves a common problem. In fact, some successful entrepreneurs will advise you to consider every problem in your area or market as a business opportunity.
If you solve a problem or meet a need for thousands of people, you will realize high profits from your startup.
2. Conduct market research
The most important step in determining if you have a winning business idea is to conducting a thorough market research. Your idea looks good on paper until you go out and determine if there is a genuine need for your product or service. Are there similar products or services in the market? What is the level of competition? Can you beat your competitors? Answering such questions from the start will help your determine if your business idea is viable.
3. Check the investment cost and financial position
Once you determine that there is need for your product or service in the market, calculate the cost of implementing the idea. Estimating the investment cost is important because the numbers will help you determine if you can start the business alone.
Check your financial position or the amount of money you are willing and able to invest into the business. If you cannot raise the full amount on your own, look for investors or partners to help you raise the full capital.
4. Develop a growth strategy
If you are going to attract investors or partners to your business, you must have a road map of how you will implement the idea. How will you grow your business from the ideation stage to earning significant profits from it? If you have an elaborate business plan and marketing strategy, you can easily convince investors to buy into your business idea.
Your plan should include an exit strategy in case your business idea fails. You may have the most brilliant idea but it can fail at the implementation stage. Investors prefer investing in startup business ideas with a contingency plan.
5. Choose a business name and suitable location
The next stage after planning and getting the capital required is to choose a name for your business. Brainstorm on all names that would suit your business based on the type of product or service. The name should be easy to remember. It should create a good impression or image of your business.
Choose a suitable location as well. The data collected during the market research will help choose a location where you have direct connection to your target market. Consider running your business online or from a home office if you do not enough capital to meet rent expenses at the initial stage.
6. Hire an attorney and accountant
You need an attorney to help you attain and prepare all the documents needed to run a legal business. An attorney will prepare your contracts, leases, and advice you on the right business model if you have partners or investors. An accountant, on the other hand, will keep all your financial records and analyze your business growth. The accountant will also ensure that you comply with taxation laws and keep your expenses low.
Working with professionals is important to ensure that you get it right from the start.
7. Get all permits and licenses
Local authorities have varying requirements for businesses in different industries. The advantage of working with an attorney is that he or she can advice you on all the legal documents you need to run your business. You also need to do your research and find out all the documents that you need to run your type of business in your state and country. Consider the zoning laws as well, because they affect startups too. Local authorities can help you identify the zoning laws and all other laws that apply to your business.
Takeaway
Many startups fail within their first three years of operation mostly because of poor planning and preparation. Your business idea will either succeed or fail depending on the level of research and planning you invest in before implementing it.
Take time to consider all aspects of the business before you launch your products or services in the market. Remember that you can always adjust your strategy based on the outcomes in the real market.