Ask yourself the important questions before financially backing that grand business idea.
After all, countless businesses never make it past the magic first year.
1. Has the idea been done before?
Entrepreneur and founder of Finder, Fred Schebesta always questions if a business is a completely new idea, or just another brand on the block.
“I always Google extensively and speak with very informed people in the industry to see if anyone has done anything like it before. Research is the key to understanding the market you want to enter, developing your business strategy and the competitors within it.”
While a business can’t plan for all scenarios, it should consider a few main scenarios and make some adjustments to suit, he says.
“To win at becoming a successful business, you must constantly look at ways to do better than your competitors, do more, innovate and disrupt,” Schebesta says.
2. Are you servicing a niche?
Make sure you’ve done your homework and understand where you sit in the market and what your competitive edge is, recommends Dean Ramler, founder of online furniture store Milan Direct.
Ramler had a background in furniture and set out to pioneer the concept of selling furniture online.
He tested his business idea by firstly purchasing a template website for $150 and starting with one small shipment or chairs.
“It wasn’t the prettiest of sites, but it enabled us to see if people would purchase furniture online without touching or feeling the product, which was the big risk when we launched. Once the idea was proved, only then did we put our life savings into the business.”
3. Will I enjoy doing this?
Without passion for the business you’re launching, it’s not going to be much fun, reminds entrepreneur Martin Martinez, who has started over 10 ventures, with successes and failures. His biggest success was the launch of Australian Poker League in 2005.
“A lot of people talking about being passionate about the business you’re launching, but marrying passion with a business isn’t always easy, practical or profitable.
“Having said that, I feel that having fun in what you’re doing is more important, because then it doesn’t feel like work,” he says.
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