The five essential questions to coming up with a business idea
07/16/2018
- Who is my customer? Who exactly are you trying to help? Get very specific here. For ease, I prefer to focus on myself: I try to be my own customer, to solve my own pain points. Chances are others are in the same boat.
- What will I sell customer? Is it a product or service? Make sure your idea is as simple as possible, meaning it requires the smallest number of steps in order to use. The ideal number of steps to use is 1.
- What will I charge my customer for what I sell? For products, base this off of how much it costs to manufacture the product, the time it takes to manufacture, and the profit margin you'd like (a good margin is 5-10 x markup). For services, base this off of the time it takes do the service, the cost for using equipment, and the profit margin you'd like.
- How will I reach my customer? How will your customers find out about your product? To reach customers, you have advertising, discussion boards (direct sell vs. indirect sell), word-of-mouth (show one customer, and see if that customer shares your idea with another), and publicity (media stories about your business).
- How will my customer pay me? What is the payment method? Cash, debit, check, PayPal, Venmo, etc.?
2 additional questions are not necessary to coming up with a business idea, but can be helpful in terms of moving forward:
- Does this idea excite me? Are you excited about doing the idea, or do you think it's going to be too much work to do?
- How can I validate this idea? How can I test to see if other people actually would be willing to pay for the product or service? Validating your idea allows you to cut your losses if your idea is not selling.
These questions right here make up your real business plan. You don't need a mission or vision statement. If your business idea excites you, that's mission enough. And if people actually want to buy your product or service, that's vision enough.