Have you always wanted to start your own business?
Do you have a lot of business ideas but don’t know which one to pursue?
Don’t worry because you’re not alone. According to Gallup, Inc, 25% of American adults have dreamed of starting their own business but have not yet taken the plunge.
In this article, you’re going to learn how to identify the right startup business idea in four steps so you can act on it and launch your business.
Step 1: Make a list of what you’re passionate and committed to
This step is all about identifying how you can combine something your passionate about and turn it into a successful business. It’s important not to list general one word answers in this step. Instead write out each one in a full sentence by writing what you’re committed to doing with that passion. For example, if you’re passionate about fitness then you may write down something such as “I am committed to helping people reach their fitness goals.”
Don’t take this step lightly, come up with at least ten areas that you’re truly passionate about. Now your passion may be something that solves a problem or stems from a challenge you’ve overcome or a complaint that you have.
The whole purpose of this step is to get you brainstorming about what you love to do and then in the next step determining if there is a profitable need in the marketplace for it.
Step 2: Determine if there is a profitable need for your idea
In this step, you’re going to conduct lots of research to validate whether there actually is a market for your idea. First, create a list of all the people and situations that might benefit from your idea.
Next, use Google search, EBay, Amazon & Clickbank to search for products or terms used to describe your idea. Look for ads, products, top sellers and affiliate programs surrounding your idea and look for what’s missing that you can add that will add value to a marketplace that’s already buying. You’ll come up with several more product ideas and possible niche markets after doing this research. Although this step will get your wheels turning, keep going and research some more.
Step 3: Define your value proposition and target market
Once you identify which idea has the greatest profitable need the next step is deciding what problem you want to solve for your market and who your target market will be. It’s extremely important to be clear on finding a solution that your customers are willing to pay for.
Your value proposition is essential if you want to take your idea and turn it into a profitable business. The benefits you provide, how you do it differently and better than others are what will make you the best option for your target customers.
Step 4: Validate your business idea
Before you go all in on your idea it’s best to test it with actual customers. The fact is nothing beats an actual customer using your product or service. Why not build a prototype that solves the core problem for your customers? The whole idea for this step is to put out a smaller version of your idea so you can see how your customers respond.
Are they excited about it? Is it solving their problem? Let your customer decide whether your idea is valuable or not. If you are getting positive feedback and reviews from your test customers then you know you got the right idea for a business.
Deciding which idea you want to pursue to launch your business is only the first step. There is still much more preparation you will need to do. Creating a business plan is one of the most important steps you will take because the plan serves as your road map for the early years of your business. Check out SBA's Business Plan Tool, it provides you with a step-by-step guide to help you get started.