According to the Washington Post, at least 50 percent of new businesses fail. Others like Forbes and Bloomberg suggest this failure rate is as high as 80 percent. Whatever the true statistic may be, it is certainly high. If you want to go into business, you must first have an idea that is worth pursuing. Below are some of the questions you should be asking yourself.
Is It Something Customers Actually Want?
First of all, if you want to be successful in business, you need to get over your own ego. You may think your idea is the greatest idea since the invention of the wheel. However, if actual customers aren’t as enthusiastic, you can forget it. You should always be thinking of potential customers first. If you haven’t performed any market research to find out if regular people could be convinced to spend their hard earned money on your business idea, you are probably going out on a limb.
Can Your Idea Can Be Marketed and Distributed Successfully?
Secondly, you may indeed have a good idea for a product or service that a few people have shown interest in. However, even so, you could still fail. You need an idea that is actually marketable. You may really like your idea for a portable toaster or dog safe hair dye, however, your idea may be so niche that it could never be marketed to a wide audience. Your start up costs may never be recovered. You also need to know the specific advertising platforms you will use to inform customers of your product.
You also need to think about distribution. Will you be able to get your product on store shelves? Could you get it listed on online retailers like Amazon? Will you be able to ship it to customers from your own website? You need to know the answer to these questions and whether not you will be able to obtain good distribution without going into the red to pay for it.
Will Your Idea Be Differentiated from the Competition?
Competition in the US marketplace can sometimes be extremely fierce. The FTC has an entire bureau devoted to taking action when certain markets become too dominated by certain companies. However, they don’t take action in the vast majority of industries that are dominated by a few players.
For your business idea to survive, it needs to have something that can differentiate itself from similar products. You may think you have a great barbecue sauce recipe, but can it really stand out on a store shelf filled with barbecue sauces with similar flavor profiles that have been around for 50 years? While marketing and packaging design can help create some differentiation, the product itself needs to set itself apart from competitors as well.
Do You Have the Right Team to Make Your Idea a Success?
Lastly, a great business idea can still fail without the right team to support it. Before you try to launch your idea, you must first do the networking to make sure you have the right support. You need to make sure the production, distribution, customer service, marketing, accounting and legal aspects of your business are covered. While you probably don’t want to spend a mint as a start-up, you still need to have competent talent to make sure you can actually achieve success both quickly and legally.