Five Elements That An Effective Business Idea Should Have

There are many different forms of business ideas. However, successful small business ideas have some common traits. Now, what is a successful idea in this regard? It is one that does not cost much money to turn into a reality, that is lucrative and fast to license.

Small business ideas clear the trickiest obstacles to introducing a product or service before business people put much time, money and energy into the idea. If you have a small business idea, you might wish to evaluate how much you are open to risk to see the idea turn successful.

A Considerable Market

Should your item fail to attract a sufficiently big market, then your business might just not break even. For an uninitiated, the term ‘break-even’ refers to a stage where returns equal the cost of starting a business. If your business ‘breaks even’, you have just as much profit as the cost. In this case, you would not waste your precious resources.

Never wonder whether there is sufficient demand for your product to back the expense of production, distribution, and marketing. Instead, figure out the information about market size for yourself by using the internet too. What kind of audience do you feel will purchase your item and where?

Are other products available in the market that serve as a solution for the same issue as your product looks to solve? If yes, then this is a good sign that you have a substantial market. Is your business idea based on a product so innovative that there is nothing quite like it in the market? If yes, this presents you with new challenges. It is possibly good and you may succeed at turning into a successful business, but be warned that it will be challenging to pull off.

Existing Production Technology

The significance of this aspect cannot be overstated. Several business people just ignore the facts of production for too long. Product ideas that necessitate the making of manufacturing tools are very cost-prohibitive. Get in touch with contract manufacturers in order to know in what way your item can be transformed into a reality. You can easily identify contract manufacturers through industry trade groups or online. Show the manufacturers a blueprint of your business idea, with drawings made through CAD software, and ask them how much money it would take to make 100,000 units or more.

Always confirm that any person who works with you have signed a confidentiality agreement. Before revealing your business idea to any person, be sure to file a provisional application for patent. It will only cost you some money to do so and will keep that idea from being imitated for a maximum of 12 months. After that one year period, you will have to submit a patent application.

A Reasonable Price Point At The Retail Level

How much money would it take to produce the product you have in mind? Get an estimate from the contract manufacturer in your area. In the event your item is considerably pricier compared to the other similar goods available presently in the market, it is a cause for concern. Retailers will not be open to stocking an item that fails to fall under an efficacious price point. As a general rule, your product should go on sale for a price that is five times more than the production expense.

An Effective Unique Selling Proposition

Several entrepreneurs do not realize that they are not selling small business ideas, but the USP of their venture. Benefits encourage customers to purchase products. Similarly, you will sell the advantage of your business’s product to every person you will collaborate with, including distributors, retailers, and investors.

The stakeholders should first know your product inside out, for its benefit details to be passed onto customers. Is your product offering a one-of-a-kind and significant benefit? Can that benefit be explained attractively in just one sentence? If the answers to the two aforesaid questions are a no, you better have a look within your organization to see what could be changed. Otherwise, you have a business idea with immense potential.

An Easy-To-Use Interface

Besides having the single-sentence pitch, your customers should be able to discover in what way to use the product you sell. There is an expression often used in connection with software type products, “steep learning curve”. Now, what does this mean? It means the process of learning is tough at the start.

If your physical product or virtual product is so complicated that users should be taught much about how it functions, it is radical and would not bring great returns. So make your offering as user-friendly as possible and it would be more marketable for you.

Leave a Reply