Before you invest your savings into a business idea, you’ll want to know it’s likely to return profits that will help you achieve your goals. Following these six steps could help improve the chances of this.
1. Do customers want it?
Once you have an idea, you need to work out if there’s actually demand for it. Some ways you can help gauge this is to:
- Use Google Trends or Google AdWords to check if customers are actively searching for it
- Look for customer insights by reading comments on social media platforms
- Ask family, friends and co-workers if they would pay for it.
2. Can you make a profit?
Completing a financial plan will help you estimate whether your revenue will be higher than your overall costs. It can show you set-up costs, how many items you need to sell to make a profit and any potential cash shortfalls. This plan will also be handy if you are looking to borrow funds as it is likely to be one of the documents that lenders ask for.
3. Research the industry
Your success in realising your business idea can be impacted by things out of your control – but ignorance of current and future trends and developments shouldn’t be among these. Keep on top of changes in your potential industry by researching online, staying up to date with news and any relevant industry magazines. Think about the long-term outlook of the industry, technology landscape and consumer demand.
4. Test your idea
Can you test your idea with a small investment? Consider, for example, making a prototype to send to potential customers or offer the service to close friends and families. The feedback you receive can help you decide if there is demand for your idea and what ways you can further improve your product or service before going to market.
5. Make sure it fits you
A good business idea isn’t just a plan to make a profit – it’s also one that fits your lifestyle. You’re going to be involved in your business for the long haul, so make sure choose an idea that matches your interests and strengths.
6. Trademark it
If you have an innovative idea with potential to be a first of its kind, you may want to consider protecting your rights by registering a trademark for it right away.