It’s not enough to know how to start a business. You must select amongst the profitable business ideas and choose the right one for you. It’s always best to critically evaluate your business idea to avoid going down a road you’ll regret. There is a right choice! Let’s see if we can find it.
You’ve done your homework, you’ve sought advice before starting a business of your own. You have thought about whether you can actually do it or not. You followed a methodology to brainstorm ideas for business opportunities suitable for you. Now it’s time to learn how to evaluate which profitable business ideas are right for you.
The process will require a logical set of criteria for evaluating a business idea and then applying it. Never get emotionally married to an idea and hang on to it no matter what. I’ve seen far too many businesses fail for that very reason. Be objective! It will save you heartache and dollars down the road.
One of my clients years ago had their heart set on owning a resort. One became available and they asked for help looking at the deal. I explained that this particular resort wasn’t likely to be successful. The advice wasn’t listened to because they were already emotionally married to this opportunity. They put their life savings into it and a year later lost it all.
You must be committed to finding profitable business ideas. It seems like a simple concept, but too often it’s ignored. Don’t you go there!
Start with a great business idea
You must be sure that you have found great business idea. Whatever the idea, it may involve building a business from the ground up, buying an existing business or acquiring a franchise. At this point that does not matter. What does matter is evaluating the profitable business ideas to find the right one for you.
Build with a solid value proposition
Your business idea should be based on your passion and dreams, your gifts and talents. These factors led to you to the selection of a business opportunity that you could bring value to. It’s important to look at your business idea and state clearly your value proposition. What of value are you going to provide your customer? What makes you unique? What differentiates you from your competitors?
There are two factors here. The first is knowing who your ideal customer is, the second what makes you unique. You have to know who you are going to sell to. You need to know what their desires are or the problems they need you to solve. Once you know that, you will develop your value proposition.
It is very important to spend the time necessary on this step. If you can’t identify a value proposition, then your business idea will fail. There must be a reason why someone would want to do business with you. Don’t even think about how to start a business at this point but rather how to bring value to your future ideal customer.
Example: for a bookkeeping service, a value proposition might be – you will maintain their books and utilize an online accounting system to give them real time access to their accounting data. In addition to the traditional services you will give them a ratio analysis comparing their business to other similar ones and track how their business is improving or failing using a trending analysis. To make this beneficial you will meet with them monthly to review that data teaching them what to look for so they can respond to the rapidly changing financial and economic issues facing them in today’s business climate.
This sample value proposition brings the customer something few bookkeepers do for their customers and is of great value, especially in uncertain economic times. Do not move forward until you create your value proposition. Go over it with your spouse or others that you trust. Ask them to be objective in telling you whether you have developed a value proposition people will buy into. Then visit with some potential customers and ask if they or others like them would be interested in a product or service that provided that value proposition. A little market research here is vital.
A profitable business idea that will work for you involves having an ideal customer base to whom you can uniquely provide the product or service they desire, or solve the problem they suffer from. Make sure you objectively understand this and can state it. If you can’t your ideal customer will never buy from you.
by Steven Schlagel – June 21, 2009