TLDR:
- Validate how realistically feasible your idea is. One of the best things to do is to ask straight from the source if you have one: the target audience
- Refine your concept by seeing what testers have to say
- Ensure your idea is legally compliant from every aspect possible and that you’re able to get all the necessary permits and licenses
- Your idea must be one that you’re financially capable of supporting as well
- Conduct a SWOT analysis before proceeding with your final decision to assess the internal and external factors
Is that million-dollar idea you have really worth that much?
If you’re interested in the entrepreneurial space, you may already have an idea that you strongly believe is that game-changing million-dollar idea.
But how can you determine if it really is?
Step 1: Idea Validation
Firstly, you have to validate how feasible your idea really is realistically. To do so:
- If you have a target audience in mind, conduct market research on their tastes, preferences, and needs. This will help you gauge whether or not there would be genuine, high volumes of demand for your idea
- Analyze the existing competition and the gaps they may have left unfilled in the market. Leverage that to adjust your idea to the gap if applicable
- Evaluate the feasibility of the idea from your financial perspective as well. Estimate variables such as initial investment required, ongoing operational costs, and most importantly, the time needed to invest.
- Seek feedback from people you may know who are a part of that target audience. There’s no better way than seeking validation straight from the source.
Step 2: Refine Your Concept
If you’re able to validate the idea, the next step is to refine your concept. Take into account things like:
- A comprehensive business plan that outlines all business goals
- Developing a minimum viable product (MVP) to showcase the practicality of your concept if applicable
- Seeing what testers have to say about your product
Step 3: Legal and Regulatory Assessment
It is obviously important to establish that your idea is legally compliant with all laws and regulations in place. Consider:
- The difficulty of obtaining the permits and licenses applicable to your business
- Protecting your idea through a patent if it is unique
- The legal structure of your idea and registering it with the relevant authorities
Step 4: Financial Feasibility
As said in Step 1, you have to also establish how feasible your idea is financially. Factor in:
- A detailed budget that covers startup costs, operational expenses, and potential contingencies
- How cash will flow in and out of your business
- How risky is your idea and the challenges you have to face
Step 5: SWOT Analysis
Assess the internal and external factors that could impact your idea to help you identify the:
- Strengths: What can you leverage and what is the Unique Selling Proposition (USP) of your idea
- Weakness: The market risks you have to take and resource constraints that may hinder the potential of your idea
- Opportunities: What are ongoing trends in the market that your idea can capitalize on and what are emerging markets you can untap
- Threat: What does the technological landscape look like and what could advance or disrupt your idea
Related Links
It’s not too hard to generate ideas; when it comes to your imagination, the possibilities are literally endless in your mind. However, what it comes down to when wanting to pursue a business idea you have in mind is determining how rational it really is in the real world rather than yours.