Entrepreneurship #4 - How Do You Know If Your Business Idea Is Good?
I’ve worked as an entrepreneur and startup coach for long enough now that people in my city recognize that. So, I frequently get asked, “I’m working on a new business idea. Can you tell me if it’s a good idea?”
The answer is, “Probably no, unless I’m in your target market. And even then it would just be one prospective buyer’s opinion.”
But, I’m a startup coach with the experience of having talked with hundreds of entrepreneurs starting businesses. I didn’t keep count - I’d guess somewhere between 1,000 and 2,000. That gives me a huge and diverse base of knowledge.
So, I can often tell you some useful information. And I can certainly tell you how to find out for yourself if your idea is good.
I CAN tell you if a business will be difficult for you to start
One easy example here is a foods business. Many people love to eat and like to cook - and they translate that into a restaurant style business. The rising popularity of food trucks has made foods businesses even more visible. Simple, right? You just cook some of your favorite things in your kitchen - just like making your lunch but more of it - and sell them. People hear about it and flock to you. Easy peasy.
Well, maybe not. You may become a little less confident once you hear that you’ll need to prepare in a commercial kitchen, be approved for food handling, know how to make recipes that scale up, have a wonderful and distinct enough product to attract buyers away from their already-favorite restaurants, know how to be a master marketer (on top of being a master chef), know how to buy ingredients cost effectively and in quantities that don’t cause a lot of spoilage, hire someone to help you make or sell your product (especially if you make to order), and so forth.
All that doesn’t mean your dream is impossible - just difficult, especially if you don’t know what you are getting into. I recently talked to a young student entrepreneur who wants to start a foods business. As I started to explain the difficulties, he stopped me. He explained to me that he was experienced in a culinary program (our local high school system has a great culinary trades program), he had a current ServSafe certificate, he had a set of menu items he knew were his specialty, he was already set up with a local commercial kitchen for prep and production, and he was planning on taking pre-paid pre-orders for delivery to minimize waste. I immediately switched from telling him the potential difficulties to encouraging him. He absolutely can do it! He is prepared.
For every new entrepreneur like him there are plenty of others who know little or nothing about the market or industry they plan to enter and discount how difficult it will be to succeed.
I CAN tell you how to find out if your idea is good
You experienced entrepreneurs know what I am about to say.
Go talk with people who would be prospective customers, people who are in your target market. They are THE ONLY PEOPLE who can tell you if your idea is cool or not.
At the risk of over-simplifying, I’d say there are three ways to do this.
First, just go talk with them. Share your idea. Use words, pictures, and open ended questions. Show them a mockup menu. Discuss your product and pricing. Tell them how you plan to be wonderful and distinct from competitors. See how many will follow your business social media or sign up on your website to be notified when you go live. You’ll get some good feedback, but these are just words - you can’t taste or experience words.
Second, make a product prototype and share it with people (in your target market, that is) at private events. One friend of mine started a new food truck, but before he ever had a truck, dozens of people had tried his entrees at private tastings - and raved about them on his social media. At his grand opening, the line was so very long that I couldn’t wait and had to skip it! He knew he had a good idea because dozens of people validated it during those tastings - and then invited their friends to his grand opening!
Third, and most risky or expensive, just start. But … plan on your early days being a test. Try your menu, try your promotion, try your systems. But be prepared to tweak them - and tweak them quickly! If customers push you away from certain products, be prepared to move immediately - to retain their interest. Don’t try this unless you have LOTS of capital and can afford to be in it for the long game. Even so, you might consider doing a soft opening or two (or three) to suss out the details and get everything just right. First impressions matter.
It’s always about customer-informed change
One last thought. Making a meh idea good, making a good idea great, making a great idea a sustained winner are all about listening to your customers and adjusting what you are doing. This won’t stop as you grow your business and work to keep it on top.
Might as well learn how to engage and respond to your target market from day one!