How to assess the viability of your small business idea
If you're like many who are considering starting a small business, you probably wonder if your small business idea is viable. And if you haven't, you should - making certain the products or services you plan on providing and in demand is key to starting a small business that will last as opposed to one that fails because of lack of interest or market saturation.
There are a number of ways you can assess the viability of your small business idea. You will want to ask such questions as:
- What is the competition like for this idea? Are there many other businesses in my area that provide similar services? If so, are they successful or do they struggle for business?
- How will my business idea stand out from other similar businesses in the area?
- Have I carved out a niche market to target my products or services to?
- Are there many prospective customers for my product or service, or are there few?
- How will I attract my first customers?
The main way to answer these questions about the viability of your small business is through careful research. The following are some techniques of determining whether your business idea is a winning one:
Find out what the competition is.
Say you have a small business idea of mobile dog grooming. While it may seem unique to you, you open up the yellow pages in your area and see no less than ten other businesses that offer the exact same service as you. When trying to determine if your business idea is viable, it's crucial that you have a good idea of the competition in your area.
However, just because there are other ideas similar to yours around doesn't mean that your business can't be successful either. Find a niche, or a smaller target area, to market your business idea to. Perhaps you can specialize in preparing dogs for shows, or grooming large dogs. Or you can have a Dog Spa. Making a niche will help set you apart from the competition and increase your chances of success.
Find out if there is a demand in your area.
Another important part of assessing the viability of your small business idea is determining whether or not there is a demand in the area. So if your business specializes in planning parties for children but if the demographics in your area include an average age of 65, chances are your business won't have as much success as, say, a business that plans retirement parties.
Learn what your potential customers are looking for.
You will have better success with your business by finding out whether or not people actually want the services or products you are offering. And if they do, find out what they would do to improve those products and services. You can start by asking your friends, neighbors, and co-workers if they would utilize or buy the products and services you are offering. If they are already using them, ask what they wished the product or service provided. Doing this will also help you to understand not only if you are providing something that people will actually use, but how you can better cater your business to your potential customers.
Assessing the viability of your business idea is crucial if you are considering starting a business.