#120: 5 Ways to Tell if Your Business Idea is Worth Pursuing in 2023

Show Notes

When it comes to starting a business, even a side business, passion isn’t enough; you also need to make sure your idea is viable. A great money-making business idea is one that solves problems and has a viable market. 
In this episode, co-hosts Nola Boea and Lori Vajda are sharing their tips and the questions you need to ask yourself, all in an effort to help you discover whether or not your business idea is worth pursuing in 2023.

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In This Episode You’ll Learn 

• What makes for a great business idea worth pursuing.
• Five ways you can determine if your business idea is a YAY or a NAY.
• How to come up with great ideas for a side business.
• Why it is SO important to validate there’s a true market demand for your idea. 

Key points Lori and Nola are sharing in this episode:

(02:43:27) The five questions to ask yourself to determine if you have a viable money making business idea.

(04:22:31) Why being first to market isn’t always a recipe for success, and what you can do to ensure you’re on the right track

(07:00:94) Is it necessary to determine the potential product-market fit of a product or service? Yes, but more importantly, this is why it’s crucial.

(11:46:17) How you answer this question can help determine whether or not your solution is a purple cow

(13:09:37) The important reason you don't want to overlook what your test audience or your research is showing you

Resources 

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Transcript

[00:00:00] Nola: A great money-making business idea is one that solves problems and has a viable market. Take Peter Thiel, for instance, who founded PayPal after seeing the potential value of an online payment system. Even if you haven't come up with a groundbreaking techy product, you might have some good ideas that you've ignored or at least put on the shelf, and now that you're ready to start your own company and B Y O B, that is, Be Your Own Boss, you may be wondering how to tell whether it's worth going for. Stay tuned friend, because in this episode we're sharing five ways you can determine if your business idea is a YAY or a NAY.

Welcome to Sticky Brand Lab podcast where we bridge the gap between knowledge and action by providing you with helpful information, tips, and tools from entrepreneurs and other experts so you can quickly and easily jumpstart your side business. We're your hosts. I'm Nola Boea and this is my co-host, Lori Vajda.

[00:00:57] Lori: Hello. You know what you and I have often shared with our listeners, and even our friends, how we geek out over brainstorming on ideas. It's kind of like that creativity spark, and we go off on a tangent. It is the thing that connected us when we first met, and it is an ongoing shared passion that we love.

[00:01:22] Nola: Oh yes, playing in Idea Land is our form of entertainment, and we do definitely geek out on that.

[00:01:30] Lori: I love playing Idea Land. Yes. Maybe we should make a game out of that. You know how they have, uh, Chutes and Ladders or Candy Land. We've got

[00:01:40] Nola: Business Idea Land. Yeah. Well, while we love coming up with business ideas and possible directions and always have, and like you said, that's what connected us, we know that not every one of our awesome ideas really would've led to a profitable business. Which is one reason we thought this topic would be a good one to explore.

[00:02:00] Lori: Exactly. I think of you have to have courage to start a business, and you have to have courage to put your idea out there, which is what your business is based on. Would you agree with that?

[00:02:13] Nola: Absolutely. And not only might someone be stepping out of their comfort zone like you just described, but I mean, you're betting that the idea you've come up with will make money even though there's not a hundred percent guarantee of financial success.

[00:02:29] Lori: I know, and that can be oftentimes scary, which is why we wanted to help people come up with a way to determine if their business idea was worth pursuing. We've identified five questions that you, listener, can ask yourself and answer.

So to get you started, question number one: How unique is your idea? Now, to answer this question, you'll need to do some research to find out how many businesses on the local, national, and even international level are already implementing your idea. If there's a large number, don't be discouraged. You want to identify how your idea will be different to your valued customers from your competition. So here, to help you, you could look at ads your competition is running. Pay particular attention to the messaging that they're using in those ads.

[00:03:29] Nola: Yes, and what you're listening for is trying to figure out who exactly are they talking to. Can you identify their target customer? Also, try to see if you can identify what they are claiming as their unique benefit. And that way you can figure out if you can offer or emphasize a better benefit. So the whole idea of listening to that messaging and analyzing it is you want to differentiate your product or service from what's out there.

[00:04:00] Lori: Those are really good pointers to keep in mind. One of the things you and I often hear is people say, that idea's already out there. That's already done. And another thing to keep in mind is being first to market isn't always to your advantage either. When there's competition out there, there's an audience out there. When you are first to market, you don't know if that's a recipe for success. A matter of fact, you're going to spend an awful lot of time educating prospective customers on the merits of your product or your service. So being first isn't always a benefit.

[00:04:40] Nola: Yes, this is especially true for products that are so unique that there's literally no category for them, or it falls into a category people may not even be thinking about. So an example here is a friend long time ago wanted to market her fresh salsa. Well, most people go for a jar of salsa. Well, in the canning process it gets cooked, which totally changes the flavor. In order to find fresh salsa, that product would've had to be provided from the refrigerated aisle. Now, how many people go to the refrigerated section to look for salsa? It doesn't happen. You would have to have a whole ramp up of marketing and educating an audience to even let them know that they can find your salsa in the refrigerated section. So that doesn't mean it's prohibitive necessarily, but it would take a lot more money and effort and ramp up to break even and have that happen.

[00:05:35] Lori: You know, your example reminds me of, I think I was in Target, the very first time I saw an end cap in the pet section, I should say. And the end cap was a refrigerator for refrigerated dog food and cat food. And because I wasn't used to seeing it there, not only was I taken by surprise. But I didn't even think that it was worth the additional cost initially, right? Because it was more. It's fresh, it has a shorter shelf life. I dismissed it as not being worth it. Now, I might consider that differently today, which is why sometimes a business idea fails when it's first to market. So, one of the suggestions that you and I recommend is if you have a brand-new idea to market, listener, consider looking if your idea is actually ever been done before. And if it has, reach out to that former business owner and interview them. Find out what went wrong. Sometimes that insight can help. Position your product or service differently, go after a different market, or just recognize that the timing is right for what you have to bring to market.

[00:06:56] Nola: Great advice, very helpful. The second question to ask yourself is: What is your product or service's potential impact? In other words, how much of a pain point is your market experiencing, and how motivated will potential customers be to solve it using your product or service? One way to answer this question is to test your idea within your target market. Now this is referred to as pilot testing, and you can do this by creating a minimum viable product, also known as an MVP, and recruiting family or friends and colleagues, or at least a handful of people who resemble your target market, and have them use your product in exchange for their honest feedback. Now positive feedback will give you quotes that you can use as testimonials on your website, not to mention giving you talking points for selling. And the negative feedback will help you refine your idea before it goes any farther in the marketplace. This exercise is also known as finding product-market fit, giving you a chance to test your idea on a small scale to gauge whether your product or service has a strong enough hook or a strong enough demand, for it to be successful on a larger scale.

[00:08:07] Lori: One of the reasons you want to pilot with people that you know is it's almost like a soft landing, right? They're respectful of your feelings. They know how hard you've been working. They can give you real feedback, but it comes in kind of a softer delivery, if you will. You can do a second round of piloting based off any changes that you make to what the first group gave you and feedback. It doesn't necessarily have to be that way, but if you do a second pilot, you can then ask your friends and family for somebody that you don't know as well. So a little softer, not as harsh as a brand new person who doesn't know you or the product at all but gives you a chance to test it out with people who would be less familiar with you and more likely to be more direct in their feedback. Just an idea.

[00:09:00] Nola: Yep. Good advice.

[00:09:01] Lori: Question number three: Why are you uniquely qualified to make this idea a reality? Now, one of the things that often comes up is that you have to be a subject matter expert. And you don't. The question is designed to help you consider why you are the right person to start this particular business, and your answer can come in a variety of ways. It could be things like your education or that you have direct, personal or professional experience, knowledge, or even relevant criteria that makes you a subject matter expert, if you will. Many successful business owners were inspired to start their business as a result of going through a challenge. And you'll often hear people say that I couldn't find something to help me with my diet concerns, or I couldn't find something for my child, and that "couldn't" is what launched them to eliminate that problem for other people. So don't underestimate your perspective as you go through your list of qualifications. Instead, focus on the top two or three that give you a distinct understanding, a depth of knowledge, or a breadth of experience.

I remember that we had a guest, Noa Gadot, and she is the founder of The Five Starz. She didn't know anything about tech when she developed a tech company. What she knew was marketing. She worked with some very big-name brands and she saw a gap in the influencer space. So for her, the unique product was designed as a solution to fill that gap.

[00:10:44] Nola: And that's an excellent idea. I'd like to interject here though, that if you feel that you lack a certain industry perspective, don't let that stop you. Because you can always reach out to people who do have that industry experience and get their thoughts. I can't help but think about this app idea I had and it's actually made some progress in development. I initially made it from the perspective of a tour guide, and I do have some experience in the travel industry, but it became apparent when I did share it with some family and friends that it was very applicable to fitness instructors, yoga instructors, and things like that. Well, I have absolutely no experience in the fitness or yoga industry at all. But I know people who do. And so that would be the next step. Get their industry perspective.

[00:11:37] Lori: Really helpful example.

[00:11:39] Nola: I don't want to say, well, I don't know anything about that, so therefore I'm not going to offer it. There's ways to find out.

[00:11:43] Lori: Exactly.

[00:11:44] Nola: So the fourth question to ask yourself is: In what ways is your solution a purple cow?

[00:11:52] Lori: And there aren't very many purple cows.

[00:11:54] Nola: That's true. . . If you saw one, you would be pretty startled. And that's the idea. Your business idea may be unique, but from a marketing standpoint, a marketing perspective, your product or service needs to stand out from the crowd. Like a purple cow. This concept of standing out like a purple cow comes from bestselling author Seth Goden. The idea is to position your product or service in a way that would make it seem so phenomenal, so remarkable that people would think it was a limited edition. The word "remarkable" itself is perfect in this context because it means worthy of attention. If you can't make a remarkable version of what you're offering, reconsider your business idea. Purple cows stand out. And if you can't at least make it sound different or seem different. Nobody will know your solution even exists to buy it.

[00:12:48] Lori: I love this idea because our previous questions, you know, one, two, and three, kind of lended themselves to interviewing people or doing research. And you can collect feedback. And that feedback, even if you weren't aware of how it's a purple cow, other people are going to give you that input. So don't overlook what your test audience or your research is showing you, because that can be really, really helpful.

[00:13:17] Nola: Very good.

[00:13:17] Lori: Our final question, question number five: How likely are you to be able to turn your idea into a business? Now, it's not by accident that we made this question number five, because here the successful business owner knows their target audience and their niche in the marketplace. They know whether people will purchase their product and service, and they understand what qualifies them to bring that solution to market.

So here, the last step is all about execution. And this is where your idea becomes a reality. Now, knowing that, you also need to be aware that there are a number of things that can get in the way of execution. Things like startup costs or ongoing operational costs. Time commitments. This might not be the right time for you because of responsibilities that you have with your employer or with your family, your friends, even your health, not to mention your own personal downtime.

Another thing that can get in the way is the competency needs, and whether you have to hire someone to fulfill the duties and responsibilities that you're not very good at. So if you have to hire people, that requires a certain amount of income or a certain salary, and you might not have that readily available for you.

Customer base. If it's too small or even too big, both can work to your detriment. And competition size. As we mentioned earlier. Too big, too little, trying to go after the same market, the same market niche, the same market audience, without understanding what you bring to the table. That can get in the way.

And timeline. As we mentioned earlier, some businesses fail because they're too far ahead of where people are in being ready to purchase the product or service. So knowing your timeline or knowing if it's a good time in the market can really have an impact.

[00:15:30] Nola: And I'd like to add one more obstacle that can get in the way of execution. That is lack of courage.

[00:15:39] Lori: Oh yeah.

[00:15:40] Nola: It really takes courage to step out of your comfort zone, whether that's trying something that you've never done, or it's selling to people you've never met, or it's having conversations with people and just trying to beat back that inner critic that tells you, who do I think I am. All of those things, those are perfectly normal. And it's going beyond those and being courageous that can make the difference between you executing or keeping it on the shelf.

[00:16:14] Lori: I love that. That is so important. Thank you for bringing that up.

[00:16:19] Nola: My pleasure.

[00:16:20] Lori: You know, listener, launching a new business is hard work, but it can also be so rewarding. Just go into it with your eyes wide open. Because launching your idea will take over your life, particularly in the beginning when you're learning the specifics of your own business. There's a learning curve there, so go into it fully aware. Or as aware as possible. I do believe some ignorance is definitely bliss when you're diving in to anything brand new.

[00:16:51] Nola: That is so true. So take advantage of that as well. And this is why we're not advising you to focus on starting a business that strictly offers you the highest financial reward. Really, we want to advise you to start one that will allow you to live the lifestyle you desire.

[00:17:11] Lori: And remember, starting a business comes with its own set of challenges. So take time to determine if the risks as well as the rewards are right for you. Just don't let your analysis become your paralysis. Also listener, be sure to stick around to the very end of our podcast for a fun little surprise we've included.

[00:17:33] Nola: If you found the information we've shared here today helpful and want more tips, tools, and inspiration delivered to your inbox, sign up for News You Can Use at stickybrandlab.com.

[00:17:46] Lori: Be sure to come back next Tuesday and every Tuesday for another informative, inspiring, and motivating episode. And remember, actions create results. So tap into your desire to create a business and brand you love by taking 1% action every day. Small steps, big effects.

[OUT-TAKE]

[00:18:06] Nola: You might have some good ideas that you've ignored. Did I say that right? You've been ignored. You've been ignored it.

[00:18:16] Lori: You can do a take two on that line.
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[00:18:18] Nola: I'll take a take two on that line.