Have you ever had a dream about how to solve a vexing global problem like hunger or disease? Lying there asleep, you get excited about what you perceive to be a simple and elegant solution and can’t wait to tell others about it. Then, in the height of your excitement, you wake up from your dream and realize your brilliant idea is not really a solution at all. So often, even daytime business ideas turn to proverbial “dust” when held up to the light of day.
The Small Business Administration recommends testing your ideas against the following criteria:
- Does the product/service serve a presently un-served need?
- Does the product/service serve an existing market in which demand exceeds supply?
- Can the product/service successfully compete with existing businesses catering to the same market niche?
According to the experts, you should be able to say “yes” to at least one of these questions before proceeding with your plans. You may think these questions are too basic, but you would be surprised at how many businesses are launched before owners and investors have solid answers to these questions.
No product or service is launched in a vacuum. Every successful venture has to grapple with the market in which it works. Answering the three key market-related questions may involve extensive, time-consuming research, but it is time and effort well spent. And just because you’ve answered “yes” to one of these questions doesn’t mean your start-up will be successful. That will depend on a large number of factors, but at least it means you’ve cleared the “does it make sense to continue” hurdle.