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Many businesses fail soon after they start-up because the idea they have is not commercially viable and cannot sustain a profitable business. A business idea is one that drives the company from its products and services to how it is marketed. A business idea need not be very unique and mind-blowing but a business idea needs to be able to capture a part of its target market. In other words, a business idea must be offering something different from what other companies are bringing to the market. In this article, we will be sharing some things you need to fulfill to have a successful business idea!
1. Enough of a market
The product or service you are offering must have enough demand else it will be very difficult to generate profits. Not only that, the market you choose needs to be sustainable, try not to be dependent on trends as trends come and go regularly. Therefore, it is important to do market research to see if the business idea you have is viable. Try not to pick a market with too many or too little competitors.
2. Able to generate a profit
Apart from choosing a good market, your business idea has to be commercially viable. You need to be clear to know how much it will cost to produce your product/service and how much you will sell it for, remember to account for expenses such as salaries, manufacturing costs, raw materials and so on. If you find that it is difficult to turn your idea into a profit, then it is either time to pick another idea or find out why it is not profitable and take steps to see how you can monetise it.
3. Able to scale
Even though your business idea is able to turn into a profitable business, your business idea has to show potential for growth in the future. It will be advantageous for you to enter the expanding markets as this ensures that your reach and profits will be maximised. As the world is becoming more digitised and connected, it is important for your business to leverage the internet to increase sales and expand your customer base.
4. Serve a purpose
A business idea must be able to solve a problem or serve a purpose. It is essential that customers are able to feel a long-term value in your products and services else it will be very difficult to convince customers to purchase your product/service.
5. Understand your target market and customers
It is important to understand the area you want to start your business and the needs of your target customers. Assess the market for your business by seeking out the potential of your competitors and conduct an assessment of how your business will perform hypothetically if you were to move your business in the right direction so as to better strategize your business.
That’s all we have on what makes a good business idea, if you have more that is not covered, do share it with us in the comments below! Let’s build a great community together!