10 Ways to Know If You Have a Good Business Idea - Small Business Trends

10 Ways to Know If You Have a Good Business Idea - Small Business Trends

10 Ways to Know If You Have a Good Business Idea - Small Business Trends

Posted: 28 Oct 2019 06:00 AM PDT

You are a budding entrepreneur and you want to know if one of your ideas is a viable business model.  You run it through your friends and family and you get a mixed bag of responses, which leaves somewhat unconvinced.

So, you ask yourself do I have a good business idea?

You will likely get many answers to that question. And based on these answers you can make an informed decision on whether it is a good idea or not. Even then, knowing which ideas to pursue as well as figuring out what products and services to offer will remain a challenge.

At the end of the day, you are going to spend your time, money and resources to get your idea up and running. It takes real-world pragmatism and a leap of faith to keep you going when things are not looking so bright. But it all starts with a good business idea.

Do You Have Good Business Ideas?

Initially, most entrepreneurs think the business idea they come up with is probably good. Some might even think it is great. It is only after they vet, evaluate and validate their idea they end up with a more realistic conclusion.

Here are 10 ways to know if you have a good business idea.

Your Business Model Can be Easily Monetized

This question is obvious enough, but you have to make sure your idea is profitable. Whether you are selling a product or service, you have to identify the profit point.
You won't need a full-on financial forecast initially, but if you know it will eventually be profitable it is a good start.

However, you might be looking to open a not-for-profit organization and making money is not your end goal. But even not-for-profits need to raise funds in order to solve the problem they are addressing. In this case, a solid fundraising strategy will be key.

Your Business Solves a Problem

The most successful businesses were founded based on their intention to solve a particular problem. If your idea solves a problem which no one else is solving or properly solving, you might be on to something.

In addition to identifying a problem, there have to be customers who also want said problem solved. Once you identify and find your customers, it is only a matter of putting the pieces together to start your business.

You Can Get Funding for Startup

You might be an idea person with little to no capital. This is where an idea which can be funded will have a good chance of actually becoming a business.

The fact that your idea is able to get funded means you have more options to establish your company. In today's digital ecosystem where crowdfunding is an option, it is a dependable way to determine the viability of your idea.

If you get your idea funded and there is a good response, it will lead to more funding opportunities as more people become aware of the business.

There's No Other Business Like It in Town

The location of a business is one of the biggest drivers for determining the future of a business. Depending on where you live, the business idea you come up with maybe the only one of its kind. Generally, this can provide a great opportunity, but it is not always the case.

You also have to vet the town to see if there is enough of a customer base to ensure your business will be profitable. Even if your idea may not work for this particular idea, keep your options open because your research could lead to new opportunities.

You Have a Good Value Proposition and Room to Grow

Again, standing out or being unique is a great indicator your business idea is a good one. Having a unique value proposition will, in the initial stages of your business, give you a great advantage.

As competitors start adopting your business model, and they will, you have to continue innovating and doing more to keep the customers you have acquired. You might have to file for patents, copyrights and other tools to protect your intellectual property. But if all goes well, and you have taken the necessary precaution, your business can thrive even with new competition.

You Have an Approach that Differentiates You from Competitors

Your idea is great, but you soon find out there are many companies providing the same product or service. This doesn't mean you should be discouraged or give up on it entirely.

Your unique perspective can introduce enough differentiators at the core of your business. This will set you apart enough from your competition to drive customers to your business. But don't make yourself so different you will alienate your customers.

The key is finding the right balance between being original and an innovator to bring customers in.

You've Tested Your Idea

Once your idea checks all the boxes, you have to test it. Eventually, you will have to find out if customers are willing to pay for your product or service. And when you are ready to test it, you have to choose people you don't know. After all, you might not get the most objective answer from your friends and family.

If you get enough of a positive response from your target audience, you are on your way to making your entrepreneurial dream a reality. The goal is to test your idea on a large group.

Granted this may not be possible if you don't have the funding, but there are now options for carrying out tests on a budget.

You've Selected the Right Market

Finding the right market for your product or service early goes a long way to acquiring customers quickly.

If you are searching for a market and you haven't quite figured out your target audience, the process can take a long time after you have established your business.

On the other hand, if you know your market beforehand and you are well aware it will strike a chord with your customers, you then have an idea which is worth pursuing.

Being in the right market also means you understand the market. This is going to allow you to adapt and make iterations to your product or service so you can continue to meet the demands of your customers.

You've Really Done Your Homework

If you are scratching your head to come up with a new business idea don't give up. Again, location plays a big role to find a market but it doesn't necessarily have to be local.

For the local angle, you can drive around town and see what is missing to get inspired for coming up with a business idea. This will take time, an open mind and thinking outside the box.

Similarly, you can do the same vetting for an online business. In this case, the research is going to take much longer, but it is still possible to identify a unique niche. If there isn't a unique idea, you can use a proven business model to start your online venture.

Remember not all business ideas are going to be unique, innovative or groundbreaking.

You've Answered the Why Question

There are many reasons people start a business, and some of them are in this article. However, you have to ask yourself why you are starting your business. Even if you have a good business idea, you should list the reasons.

Your mission, sense of purpose, and passion for your idea is critically important to ensure the long-term success of your business. In addition to these qualities, your heart has to be in it too.

If your heart is not in it, it won't be long before the daily grind of running a business wears you down. It is times like these people who are wholly invested keep going and eventually succeeding.

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Female Entrepreneur Road to Success: Successful Halloween Marketing Ideas for Small Businesses - Black Girl Nerds

Posted: 31 Oct 2019 06:57 AM PDT

They are daringly hitting the market, and trying to wade through the competitive business landscape to reach the winning podium. But reaching the top is not easy because of the harsh competition unleashed in the market. Staying with the old marketing tactics is doing no good to the business success. That's why businesses need to evolve with the changing marketing requirements by bringing new ideas – just like incorporating holiday season's extravaganza in your marketing tactics.

Halloween season is about to kick start, pumpkins are about to hang in the streets and spooky spirits are ready to unleash. And it is a great time of the year to frighten poor sales and welcome new customers.

Here are given some Halloween themed marketing ideas to build a strong customer base with amazing customer service:

Tint in Halloween Colors:

You don't need to sell only Halloween specific products to tint in the shade of Halloween. Don't worry if you are not selling Halloween costumes or candy buckets, you can still make your product fit for the Halloween eve. If you are running a clothing line, launch Halloween themed clothes. If you are in the bakery's business, what about selling pumpkin-patterned cupcakes? And if you are a company selling services, not products, then what about conducting Halloween-themed contests? Options are endless; you just need to think while wearing Halloween's spirit and in no time, you will come up with an amazing idea to tint your product in the colors of orangy feast.

Go Old School with Modern Touch:

You can also revitalize the old school marketing tactics with a modern touch for an impactful marketing spell. Like, you can go back to postcard marketing by making customized Halloween related postcards and send them to the list of your loyal customers as Halloween greeting. Believe me, your customers will not only feel valued, their loyalty with your brand will also increase.

Halloween-ize Your Branding:

The simplest way to get your business into Halloween spirit is by Halloween-izing your brand. You can change the color or style of your logo in Halloween's theme for a week. Or you can design shopping bags, website's design, or stationery that indicates you are all set to drench in the spirit of the spooky eve.

Engaging Halloween Promotions:

Every brand tries to give out discounts on important celebrations. But you can convert your sales and discounts promotions by creating engaging ideas. You can organize a contest to win discount code or hide the coupon somewhere on the website to increase user engagement. It will not only make things fun for your customers but will also enhance their interest in your brand.

So, this Halloween season, get ready to mark your name in the list of successful female entrepreneurs with these marketing tactics. The way you present and carry your brand really matters, and you can't get a better start than Halloween to kick start your success.

The Trillion-Dollar Opportunity in Supporting Female Entrepreneurs - Harvard Business Review

Posted: 31 Oct 2019 05:14 AM PDT

Executive Summary

New analysis by Boston Consulting Group shows that if women and men around the world participated equally as entrepreneurs, global GDP could ultimately rise by approximately 3% to 6%, boosting the global economy by $2.5 trillion to $5 trillion. Currently, women-led businesses are less likely to survive, despite evidence that their startups are often highly successful. So how do we support female entrepreneurs? The focus is often on improving access to credit or providing training to help women build new skills—two areas critical for improving the success of women-led businesses. However, another key factor in the success of these businesses tends to be overlooked: access to networks.

C. J. Burton/Getty Images

There is much discussion and debate about how to support female entrepreneurs — and rightly so. Currently, women-led businesses are less likely to survive, despite evidence that their startups are often highly successful. New analysis by Boston Consulting Group (BCG) shows that if women and men around the world participated equally as entrepreneurs, global GDP could ultimately rise by approximately 3% to 6%, boosting the global economy by $2.5 trillion to $5 trillion.

So how do we support female entrepreneurs? The focus is often on improving access to credit (financial capital) or providing training to help women build new skills (human capital) — two areas critical for improving the success of women-led businesses. However, another key factor in the success of these businesses tends to be overlooked: access to networks.

Working with public, private, and social sector clients around the world, we have seen first-hand how potent such networks can be. And we have also come to understand that these supportive mechanisms are in short supply.

The good news is that action in all sectors can address this gap.

The Gender Gap in Entrepreneurship

To better understand the entrepreneurial gender gap we analyzed 2014-2016 data from the Global Entrepreneurship Monitor (GEM), breaking down entrepreneurship and business sustainability rates by gender and across 100 countries. Among the findings:

  • Across all six global regions, the percentage of working-age men who start a new business exceeds the corresponding percentage of working-age women who do by roughly 4 to 6 percentage points.
  • Four countries — Vietnam, Mexico, Indonesia, and the Philippines — have managed to buck the global norm; more women than men launched new businesses in these countries in 2016.
  • In 50 of the 100 countries studied, the gender gap in founding startups (the percent of men versus women who start a new business) narrowed from 2014 through 2016, with the biggest gains occurring in Turkey, South Korea, and Slovakia.
  • In 40 countries, however — most notably in Switzerland, Uruguay, and South Africa — the gender startup gap is widening.

Although the gender gap in startup activity is fairly consistent across most countries, the gap in long-term business success varies more widely. In all regions except North America, women-led companies have lower sustainability levels than companies led by men. In the Middle East and North Africa, for example, women's businesses are about 50%  as likely as men's to remain in operation 3.5 years after creation, while in Latin America, the women's businesses are 82% as likely.

Drivers of the Gender Gap

Our research indicates that there are many reasons for these deficits, including differences in access to financial support. According to a BCG analysis of 2018 data from MassChallenge, a US-based global network of accelerators, investments in companies founded or cofounded by women averaged $935,000, which is less than half the average of $2.1 million invested in companies founded by male entrepreneurs. This disparity exists despite the fact that startups founded and cofounded by women actually performed better over time, generating 10% higher cumulative revenue over a five-year period: $730,000 for women compared with $662,000 for men.

This funding challenge is well documented, but our work also identified another, underappreciated challenge — women's relatively limited access to "social capital" in the form of robust support networks.

Again and again we find that networks are a critical factor for small business success. In low- and middle-income countries, for example, we studied how knowing at least one other entrepreneur (a proxy for entrepreneurial networks) impacted women-led businesses. We found that stronger and broader networks are linked to smaller gender gaps in business sustainability and improved access to a variety of funding sources. Research by other groups, including the Asia Foundation, has found that peer-to-peer networks encourage women to set higher aspirations for their businesses, plan for growth, and embrace innovation.

Building a Better Network

Large corporations can play a big role in cultivating networks. In many parts of the world, women-led small businesses are a significant element in global supply chains, whether as distributors, retailers, or suppliers. Companies can foster networks that help those female entrepreneurs gain insight and advice on everything from how to finance their operations to how to manage inventory. Consumer-packaged goods, for example, can partner with non-profits, trade associations, or local chambers of commerce, to bring together women who run small shops that distribute the company's products.

Supporting women-led businesses in this way is good business. If they do it well, companies can build a more diverse and reliable supply chain. BCG research has found this is one of many opportunities that companies have to advance societal goals while boosting returns for shareholders.

All organizations that support female entrepreneurs — including companies, international donor groups and governments — can magnify their impact by creating and building out networks for women. In our experience, the best networks are built on the principles of intent, inclusion, and interaction:

Intent: From the start, a network must have a clearly defined purpose. Networks should be much more than a glorified Rolodex. What can women gain by joining the network? Will they get access to human and financial capital, as well as social capital? How can the network help women achieve tangible business goals? Endeavor, for example, has a clear mission with its mentor and investor network to select and mentor high-impact entrepreneurs from around the world and accelerate the growth of their ventures, providing business advice and better access to financial capital. (Full disclosure: BCG has supported, and continues to partner with, Endeavor.)

Inclusion: Next, choose participants carefully. The best networks have a highly dedicated founder, whether that is an individual, an NGO, a corporation, or another organization with a long-term interest and presence in the community. They also have an active membership, and a diverse membership base, including a mix of new entrepreneurs and more established business owners, ideally with varied cultural backgrounds. To drive engagement and commitment, network founders can consider charging membership fees, instituting mandatory attendance requirements, and requiring interviews or references for new members.

Interaction: Structure the network to facilitate both formal and informal interactions. Formal training has its place, but informal, peer-to-peer interactions are crucial to building trust and ensuring that the network stays relevant over time. Online platforms can be critical to success in this area. Nigeria's Cherie Blair Foundation for Women, for example, has formal mentoring programs, but it also encourages informal relationships, idea exchanges, and collaboration through its online forum which members and alumni can access on demand, whenever they have an internet connection.

It is no exaggeration to say that female entrepreneurs have the power to change the world. Closing the gender gap in entrepreneurship and fueling the growth of women-owned enterprises will unleash new ideas, services, and products into markets around the world. In order for that to happen, we need to ensure women have access to all forms of capital, particularly social capital in the form of powerful networks.


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