Some entrepreneurs devise a new business idea every day and only act on the most promising ones. Others will put all their time and effort into devising one idea and then commit to it.
So long as it’s a good idea, neither path is the wrong one. But it’s in recognising a good idea from a bad one that successful entrepreneurs earn their keep.
At SME&E Festival, you’ll be surrounded with entrepreneurs of all kinds. Some will have nailed their process of business conception while others will be attending to learn such skills from their peers.
Whichever end of the entrepreneurial spectrum you sit on – promising or proven – you’re sure to find your niche at SME&E. But if you’re of the former, this blog is certainly for you.
Read on to understand how to identify the foundations of a successful business.
Is There A Market For It?
Call it demand, call it a niche, a gap, or a problem to be solved. However you look at your idea, it must satisfy some need for your target audience.
If your idea solves a minor inconvenience in your own life and no one else’s, it’s highly unlikely to become a feasible business.
Make it unique so that it stands out from the crowd of new businesses, but not so unique that no one will connect with and make use of your brand.
Get an understanding of the competition within this niche. The very fact that you have competitors is a good indicator that it’s a feasible idea, but too many competitors and you’ll struggle to crack into a saturated market.
Finding some way to differentiate from the competition will be critical. This could be by directly mitigating an issue in one of their offerings, or adding some capability on top of theirs in some way.
If there are no competitors around, make sure there’s not a reason for it – like it’s a bad idea. Once you’ve triple-checked yourself, feel proud to be a first mover into this new and exciting venture.
Once you’re confident in your idea and see a need for it in society, go and ask society. Start with those closest to you but don’t rest on their positive feedback in case they avoid hurting your feelings.
Visit industry events like SME&E and float your idea to entrepreneurs who know the ropes. Those who’ve “been there and done that” will give you the clearest idea of whether an idea is a good one.
Just make sure you trust whoever you tell or else you risk letting someone take your idea and run with it!
Is It Scalable?
The next tick-box is to ask whether your business has room to grow. There’s little point in starting a small business if it will always remain a small business. Sure, some people dream of running that little coffee shop on the corner for the rest of their lives, but it’s hardly unique is it?
For a great business idea to take off and keep momentum, growth must be profitable. Whether you plan to expand into new locations or take over a larger slice of your current market, it pays to research your idea’s growth potential.
Consider also the trajectory of your idea over time. A good idea today might not be a good idea in 5 years and few businesses make much of a dent while still in their infancy.
If you’re going to be playing catch-up on rent more than you are catching up with clients, your grand plan could do with some reconsideration.
Do You Have Start-Up Funding?
The beauty of a strong network is you can tap an industry of potential investors to buy into your big idea.
Entrepreneurship is an intricate game of give and take. We keep our cards close to our chest while also supporting like-minded legends to pursue their own dreams. No one wants their idea stolen, but when someone else hits the jackpot, we all want to invest in a slice of the pie.
Take this idea and run with it, crowdfunding as much as possible to get your business off the ground.
Businesses intrinsically rely on commercial viability, so anything requiring hefty start-up capital will be behind the 8-ball from the get-go. If your idea can begin with a few computers and a small office space, you may be in luck, whereas more expensive equipment and technical labour will be more difficult.
Set yourself a timeline in which you plan to be financially self-sufficient and confidently present this to your investors. With any luck, they’ll be more inclined to buy in with a clear idea of when they’ll start seeing a return on investment.
Need to Know More?
There are plenty more questions to ask about starting a new business, all of which can be asked at SME&E in Auckland this November!
Book your tickets today and invest in yourself before you invest in any business. There will be ample opportunity to network, learn, share, and party with a community of established entrepreneurs. See you there!