One of the biggest challenges in developing a business idea is ensuring it has the right qualities to succeed. With so much advice out there, it’s crucial to focus on what truly matters. Many businesses fail because their ideas aren’t fully developed before hitting the market. To boost your chances of success, consider the essential characteristics outlined below, drawn from the experiences of successful entrepreneurs.
1. Scalable
Scalability is the characteristic of a business idea that allows it to grow at the exponential level needed to evolve into a large business. For example, a scalable business model will allow you to transform your revenue from $100 a day to $200 a day without doubling your inputs or costs needed to create that revenue. Although you can have a business idea that is not scalable, this is a key aspect that will take your business idea from average to great.
2. Solves a Problem in a Way That Is Intuitive and People Like
So many business ideas fail because they don’t solve the problem in a way that people like, or the solution is not intuitive and is hard to understand. A great example of intuitive solutions is Apple; they have created a product that is intuitive to use, while solving several problems users had with other phone manufacturers.
3. Has an Existing Market, or Has the Capability to Create a New Market
There are many ways to make sure your business idea has a market. The first option is to find a partially validated business idea. To accomplish this, you can discover business ideas from the news.
Instead of entering an existing market, another option is to create a different market, which you will fill. A perfect example of this was Amazon when they created an e-reader. Although not the first to create an e-reader, they quickly understood what problems existed in the market and addressed them by creating a significant library for e-readers to access.
4. Enters a Growing Market
Never enter a market that is not seeing growth. Industries go through cycles, and to think of a business idea in a declining or peaked market will only create grief once you launch. Measuring the growth of the market (if you are entering an existing market) is crucial to making sure your idea is great, and will succeed in the future. One of the best ways to get numbers about industry growth levels is from stock market analysts.
5. Sustainable: Has a Multi-Year Plan
Great business ideas need to be sustainable in two regards:
- They use and have access to resources that can last for the next 100+ years. Great businesses never exhaust their key resources, otherwise they will exhaust themselves and die.
- They have a vision. Without a vision of where your business idea will be in five years, it will be hard to carry out day-to-day activities that relate to creating a business that stands the test of time.
6. Profitable
To make sure you have a profitable idea, a financial projection can be used to roughly estimate when you may break-even, and when you will make your first profits. This is a good gauge for your business ideas. If you create the projection and it looks like there is no chance this business will reach profitability within three years, it may be a good time to start thinking of new business ideas.
7. Differentiated
Your business idea needs to be different from existing products or services. Now I am not talking completely different, but your business idea needs to offer something that is unique and not being replicated by others yet. One interesting example is the big banks. On the outside they all seem to offer and do the same thing. However, if you look closely, some banks specialize in providing the best services for small businesses, or provide the best customer service to their retail clients.
Turning a business idea into a successful venture requires more than just a spark of inspiration—it demands careful consideration of the qualities that set great ideas apart. If you’re ready to take your business idea to the next level, consider booking a free appointment with a Business Link advisor to get personalized guidance and support.
Author: Mike Nesselbeck, Founder of Business Idea Insight
