There are 5 key phases to go through before you know if you have a great business idea:
- Identify the problem you want to solve.
- Poke holes in your solution to find and solve weaknesses.
- Learn about your market size and opportunity.
- Research, research, and more research!
- Evaluate your skills and capabilities, and find partners if needed.
Crisis breeds innovation – it seems each hurdle faced by large numbers leads to the emergence of new businesses, brands, and ideas, as entrepreneurial minds seize upon the opportunities that present themselves as new weaknesses and needs are exposed.
Coworking itself is an ideal example.
Following the ‘Great Recession’ of 2007-2008, coworking spaces like Hub Australia emerged to fill the needs of these entrepreneurial types who leapt at the opportunity to create their own businesses and income streams after finding themselves unemployed as a result of the global recession.
Coworking spaces cater to large businesses and entrepreneurs, allowing entrepreneurs access to a growing community of potential clients and a space that adapted to them as they grew.
The recent global crisis may have had your mind working overtime as you spotted opportunities and gaps in markets that your skillset and business prowess can solve.
But how do you know if your idea is worth chasing?
Identify the problem
Learning as much as you can about your identified problem will help you identify whether your business idea is able to solve an issue completely or if it can contribute to a partial solution.
Is it a new problem, or has it emerged in response to recent events? Is your idea a completely new one or an adaptation of existing solutions?
Poke holes in your concept
Once you have a solid plan of the problem your new concept can assist with, it’s time to tear it to shreds. If you have a friend or colleague who is a true realist, sit down with them for a brainstorm where their sole purpose is to point out all the ways your idea might not work or could fail.
It’s not likely to be a fun exercise, but it’s necessary before taking any further steps. Push yourself to think up solutions, or if you’re facing insurmountable issues with no obstacles you may need to pivot your idea or accept it is not the right solution for the current market.
What is your market opportunity?
Once you have worked out any issues in the logistics and plausibility of your idea, it’s time to start looking into who your product can help.
Finding out about demographics, spending habits, loyalty habits, and requirements for your future target audience lets you gather information about the financial opportunity available. If the market size and buying power are viable for your business, it’s time to move to the next step.
Research, research, and more research
Now is time to start absorbing every piece of information you can. Look into brands already in the space, how they’re succeeding or failing, and see what lessons you can learn from them. Reach out to people who have deeper knowledge into the parts of the industry or area than yourself, and have fact-finding conversations.
You should also looking into funding and grants that may be available, as this is the ideal time to start considering them before creating a business plan that may preclude yourself from access to extra finances that can be a major boost at the beginning of a business journey.
Self evaluation and potential partnerships
It’s time to get self-critical.
Identify what skills you have, what can be built on, and what is missing from your arsenal. No founder or entrepreneur possesses every single skill necessary to run a business (regardless of what their social media may say), and knowing these gaps early on helps you know when you need to reach out to your networks for the best advice and assistance.
If you have someone who you think could be a great partner or support for your idea, you now have strong foundations to show them the plausibility and potential markets to bring the best talent onboard and set yourself up for success.