On Growbiz we talk alot about growing your business, but what about if you are just starting out on your entrepreneurial journey? What if you have a great idea? The real question to be answered is, can it be a great business?
First, you have to really understand and evaluate your idea, says Adriana Madrinan, a consultant at Florida SBDC at FIU, the small business development center within the university’s College of Business, who gave a recent webinar on this topic in partnership with SBDC at FIU and Prospera.
Does the business idea stem from one of your hobbies or skills or is it a unique idea that fills a need in the market?
If you are trying to develop a hobby or side hustle into a full-time business, you have to ask yourself honestly, are you willing to be immersed in your hobby 24/7? Are people willing to pay you for your hobby? Are you willing to do the research to make sure there is a market?
If you have a skill you want to build a business around, such as a consultancy, the same questions apply, plus a big one: Do you enjoy working with others?
For any kind of idea, it needs to add value — it needs to solve a problem for a segment of clients. So an important component of evaluating an idea is determineingif the market is large enough.
You need to know your customer. Who are you selling to? Is it business to consumer, business to business, busines to government?
Once you know your segment, you have to listen to you customers and potentials customers very carefully, Madrinan said. What are the pain points that they have, can they switch to your product easily, and how much are the willing to pay for your product or service?
You need to ask: Is this a good opporutunity for me? Measure the opportunity in four areas: how big the impact your opportunity will have on your customers; the amount of time and effort it will require; the profitability of your idea; and how passionate you are about your idea, because ideas are easy, execution is not.
Is your market growing, or is it declining? You have to know if you can get funding to start your business, and evaluate your infrastructure needs.
And finally, you need to have an eye on the trends: the technology, regulartoy and social and cultural trends that could affect your market and you business.
Madrinan presented a market test you can use to help figure out if your idea brings value.
A good way to test your idea is through a survey and you don’t really need hundreds of participants. Madrinan said a survey of as few as 45 people is a good-sized group, but just make sure they are really in your target market.
Being able to communicate a clear value proposition to customers is key. “Your commununcation of your offer of your product or service has to be very clear and focused.,” she said. You can’t be all things to all people.
There are many more tools that can help you. She recomments using a Business Model Canvas to think through your idea and the steps it will take to make it a company,
“I encourage you to work on your ideas, and we are here to help you. i’ve seen many ideas blossom,” she said. But you have to start: Madrinan recommended creating a three-month action plan, with 3 steps to take each month.
In the webinar for SBDC at FIU and Prospera, two organizations that help small businesses launch and grow, Madrinan gave much more advice, and answered questions. You can view it here.
What are ways to research your market? Madrinan said these market research links may help:
To keep up with the trends, here are some sources Madrinan uses:
- Marketplace podcast – https://www.marketplace.org
- Marketplace Minute – https://www.marketplace.org/marketplace-minute/
- NPR The indicator from planet money – https://www.npr.org/podcasts/510325/the-indicator-from-planet-money