By Marvin Ng

In our last issue, we dealt with the entrepreneur i.e. the person behind the business.  In this issue, let us take a look at the business idea.  Although a good business idea does not assure success, a bad one most definitely guarantees failure!  So how does a good business idea look like?  The following are some of the things to look out for:

1. ADDRESSES FUNDAMENTAL NEEDS.  The product or service addresses the fundamental needs of its customers.  There is a market demand or at least a potential market demand for the business’ offerings.  The benefits of the product or service are clear to the customers and easily communicated.  If product or service is new and novel, it should fulfill unmet needs of the customers.  If it competes with existing products or services, it should possess significant improvements (e.g. price, functionality, quality, etc).

2. UNIQUE SELLING POINT. The product or service has unique selling points that are not available anywhere else. 

3. NOT EASILY COPIED.  The product or service is not easily copied by others.  The product or service can be protected by a number of ways including, enforcing intellectual property protection (e.g. patents, registered trademarks, etc), building up a strong brand name, or even making essence of the product or service a trade secret.  Coke, for example, has built a tremendously strong brand name and also kept its recipe a secret. 

4. GLOBAL REACH.  The product or service is meaningful to customers overseas.  A business with global reach is not constrained by the size of the local market and will have plenty of room for future expansions.

5. SIMPLE.  The business idea is simple to understand and easy to implement.  The business can be clearly described with a few sentences.

6. LOW OVERHEADS/STARTUP COSTS.  The business can be started with very little money or without putting up key personal assets.  The business does not incur high overheads and the expenses are dependent mainly on the level of business activities. 

7. E-S-I.  “E” for experience, “S” for skills, and “I” for interests.  The business leverages on the work experience, skills, and interests of the business founder(s).  This is especially important for a business that starts out as one-man operations.  While the experience and skills of the founder(s) helps speed up the learning process, having interests in the business is a great source of motivation.  For example, if the business area is related to a hobby, work tends to seem like less of a chore! 

8. LEGAL.  This is the MOST important quality!

You can use the guidelines above to sift through your business ideas.  You may just discover a couple of gems!

COPYRIGHT(C) 2002 By Marvin Ng

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ABOUT THE AUTHOR:

Marvin Ng provides how-to advice on start-up and business issues.  Visit http://www.startupcafe.com to get useful start-up advice and interesting business ideas.  Become a subscriber of our online e-zine and draw inspiration and ideas from the stories of other seasoned entreprenurs.  mailto:subscribe@startupcafe.com