When you’re thinking of starting a business and are in the planning (or dreaming) stages, it can be really hard to know if your business will work. You’ve never done this before. You might not have any business experience. All you’ve got is an idea and passion to try. So how can you be sure?
Well, in my experience this is how to know if your business will work. It’s just three key things you need to know:
1. Your business meets a need
It’s vital that your business is delivering a service or product that meets a need. That can be something practical, like gardening services, HR consulting or personal training. Or, it can be something you might consider non-practical but still, meets a need. For example, selling beautiful handmade jewellery might not be solving a ‘specific problem’ but you are helping people to give a thoughtful gift, or make themselves feel better by wearing your jewellery.
How do you know if your business meets a need?
Consider the AFTER effect of whatever you wish to sell. What is the main result you offer? If you can’t answer this question, you will struggle to communicate it to people who are willing to spay for it. Which leads me to the next point…
2. People will pay for it
Whilst meeting a need, in my opinion, comes first. It’s also key that people will give you money for the service or product you provide! You need to have enough people willing to pay you to have a successful business. This is now easier than ever before thanks to the internet and not solely having to rely on local trade, however even in the online world, you’ll struggle to survive for long if people aren’t compelled to pay you.
How do you know if your business offers something people are prepared to pay for?
In a word, research. It’s your job to go and find out if there’s a captive market out there who are actively looking to employ your services or buy your product. One great way is checking out the competition…whilst it might feel like too crowded a market to enter if there are lots of people doing what you do, it is a great sign that there’s a real need people are willing to pay for. If you can stand out in some way, and offer a better service or product, you shouldn’t run into many problems.
Another way of researching is going out and asking people who you think would be interested if they actually are! You’ll soon get a sense of demand (and you might just pick up your first customers!)
3. It’s scalable
Finally, a successful business is one that is scalable. That means it can grow and continue to sustain itself and you over time. Whether you decide to hire staff or remain a sole trader is up to you, but it’s important that your business has room to expand. For example, you can add new product lines or services or you can add a VIP option to your existing services. Or you can take on staff to delegate to, whilst you focus on bringing in new business.
How do you know if your business is scalable?
You can get a sense of this by looking at your competitor’s offerings, or even by the ideas you have for growth and whether you can combine ideas and products/services together, or add additional elements to them to grow. Or, you know you can employ people to run certain elements of your business whilst you bring in more customers.
As you can see, understand these three things in the early days of thinking of, and setting up, a business will ensure you don’t make a costly mistake and will give you the opportunity to make money fast without massive investment up front