Every business idea may not be a good idea. Here are some ways to identify bad business ideas and take action.
If you hear from friends, family and experts that your business idea is not viable, it will be obvious. If you don’t have help or an audience, your idea will be lacking spark.
Get feedback from industry leaders online or through other funding sources on your business ideas.
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When you have realized that your business idea is flawed, take a step back to see what went wrong. You can use what you have learned to create a better business plan.
This article is intended for entrepreneurs who want to avoid bad business ideas.
9 ways to determine if your business idea is a failure
If the following statements are true, you might have a bad idea for a business.
1. Experts will tell you that your business idea is not good.
If an expert says your business idea isn’t feasible, it is a sure sign that it is a failure. You might not get the same critical feedback from everyone, so make sure to consider who you are speaking to. Sometimes, a negative reaction can be valuable.
Find an expert in your field and ask them what their opinion is about your idea. Dan Fendel is a serial entrepreneur whose most recent project is a boating safety firm, Float Plan One.
Fendel stated that experts who he has spoken to often have candid opinions on his business ideas. Fendel offers to pay for lunch in order to make the meeting worthwhile.
2. Nobody is buying what you are selling.
You don’t have to rely on experts for their opinions about your business idea. You can get valuable feedback from family, friends, and strangers that could help you refine your idea or scrap it entirely.
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Ask people to tell their friends about your idea and ask them if they would be willing pay for the products or services that you offer through your business. Your mother is the only person who will buy what you are selling, so your business idea is probably not a good one.
3. The idea is not exciting to you.
Although outside opinions can be helpful in deciding whether to pursue your business idea, only you can determine if it is worth your time.
You are the one responsible for bringing a business idea to life. This is where you can gauge whether it is worth your time. Ask yourself this simple question: Are you passionate about your idea or not?
4. There is no one who will help you.
Entrepreneurs rarely launch businesses without seeking out (and getting) support. Outside support is vital for new businesses, regardless of whether it comes from industry experts, friends, family, or investors.
If you are unable to find the support that you need to launch your business, it could be a sign your idea isn’t right.
5. It’s not scalable.
What size business do you want to start? Although some businesses are larger than others, most businesses that succeed start small and then grow over time.
Danny Halarewich (co-founder and CEO, LemonStand), a former ecommerce platform for online retailers, said, “Launch small.” He said that small businesses should be started to accommodate the inevitable changes that will need to be made as their business grows.
6. It does not meet a market need.
You may have created a new product, or a solution to an old problem, but this doesn’t mean that you should start your own business. Businesses that are able to sustain themselves must not only offer something new but also something that people actually want.
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Conrad Bayer (CEO and cofounder of Tellwise), a cloud-based communication and sales platform, said that innovation must be practical. It’s an area in which entrepreneurs make mistakes often. They mix novelty and utility. It doesn’t necessarily make it new or useful.
7. Your niche is too narrow.
A niche market is a key to many successful businesses. You might need to reconsider your choice of niche. Although hipster boutiques and organic, non-GMO juice bars are a hot trend right now, your business idea could fall apart if it is tied to current trends.
Andrew Zurbuch, broker at Integrated Financial, said that if it’s a niche product, it might not be a good idea unless there is a substantial niche market and tremendous test sales.
8. It isn’t creating buzz.
Many people test their business ideas on the largest court of public opinion: the internet. Consider following the same path to determine if your idea merits being pursued.
Dustin Christensen is an entrepreneur and digital marketing manager at Jackson White P.C. in Arizona. “The best way for judging a business idea is to figure how to test it with a large audience, on a budget you’re comfortable with.” “The goal is not to make money right away, but to have a realistic idea about the demand for your idea.”
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9. It’s confusing.
It’s unlikely that anyone, not even you, will be able to explain your business idea. Jeff Harmon, president and CEO of Brilliance Within Consulting & Coaching, told his clients this.
Harmon stated that clarity is the most important thing he looks at in a business plan. A prospective business owner who is not clear about their business idea will likely fail.
Harmon said that he uses a set of questions popularized in business management guru Patrick Lencioni to assess clarity.