By: Javi Calderon
on Sunday, December 19, 2010
How to Choose a Startup Business Idea that is Sure to Succeed
Many hopeful entrepreneurs are in search of that illusive brilliant idea that is two steps ahead of the curve and is destined to make them millions; the next Microsoft, Facebook or iPod – the next big “it” item that everyone will want and no one will be able to live without. Unfortunately, the billionaires who started these companies probably have a dollar for every entrepreneur who thought they had the next big “it” item but failed miserably.
This is why everyone who has thought about starting a business always talks about how risky it is. And it’s true, every year millions of ideas flop and tens of thousands of small businesses close their doors. However, the key to starting a secure business that you know will succeed isn’t outwitting or predicting the market and the competition, it’s actually quite the opposite, it’s finding a niche in an established and thriving market that is proven, growing and lucrative.
Think about how many phone service providers you see commercials for every day, and how many chain pizza restaurants
. These businesses share a market for a service that is lucrative, established and most importantly, stable. For the foreseeable future Americans will continue to buy their pizza and cell phones. Instead of playing roulette with your business future, make the safe bet.
Tips for Choosing the Right Business Idea
First off, before you sink any money into an idea get a grasp on your market and the industry through careful research. Starting an own business will take tireless effort and is sure to entail many hardships, so chose a product or idea that you enjoy and feel passionate about. To make your startup business a success you really have to understand the nuances of your industry, you will have to know your competitors, and you will have to truly believe in what you’re selling.
It is absolutely crucial to keep your feet on the ground. Try to avoid the daydreams of expansion and private yachts, etc. Make sure your business can succeed on a small scale first because you will certainly have to start small and build up. There will be no easy short cuts. Most businesses will never be worth a million dollars, make sure your business idea can at least support you.
It is incredibly difficult to convince a venture capital firm to invest in a startup business. They tend to prefer investing large sums of money in ideas that have the possibility of very high returns. Therefore make sure your business can get off the ground with minimal funding. It is much easier for a proven and established business to acquire growth capital than initial funding.
As I said above, enter a market that is already established and lucrative. Entering a market is much easier than creating a market for a new product or service. This will also provide you with case studies, your competitors, who you can observe and analyze so you can determine how to run your business and how to tailor your business as an alternative to theirs. Knowing your competition, and knowing what they do well and what they do poorly is absolutely crucial. Learn from your competitors’ successes and mistakes. Copy where they succeed and improve on the aspects of their businesses that they don’t do as well. You have to provide customers with a reason to choose you over the competition. What makes you different and better?
Focus on quality service and quality products. Your product is the pillar or the backbone of your business. If your product is shaky, no matter how much money you put into marketing and advertising, your business will suffer. Think of the product as the ground floor of a building. If the foundation isn’t solid the top of the building will wobble. If your product is good the customers will notice. Execution, efficiency and quality products will take your business further than fancy signs or clever marketing.
Following these tips won’t get you on the cover of Forbes or Time Magazine
, but you will end up with a much more practical and stable business model and better chances of having a successful business. Whether you decide to open your own New York
style pizza shop, an outdoor sports equipment store in Colorado
, or a bed and breakfast in Florida
, by starting small, entering an established market and staying true to yourself, you will greatly increase your chances for success.