GUEST POST – Is Your Business Idea Good Enough? by Evan Carmichael

Published by Mike Michalowicz (Google+)

Think you have the next great business plan? Here's how to know if your business idea is good enough.

  1. Do you have a customer? As the saying goes, nothing happens until somebody sells something. Are people actually willing to pay money for your product or service? Prove it by getting going and landing your first client. Nothing speaks louder than having money in your pocket from satisfied customers.
  2. Do you love it? If you start a business just for the money you probably won't make much of it. To get yourself over all the hurdles of starting a business you have to really be passionate about your idea and be willing to push through obstacles to succeed. It's easy to say that you'll be able to do it but time will tell if you really love it enough to continue through the tough patches.
  3. Can you get started right now? The best businesses are the ones you can begin right away – you don't need to wait for funding, you don't need to wait for a new technology to become available or for new legislation to pass. You don't need to wait to find the "right partner" to be able to hit it big. The more you have to rely on other people and outside forces, the less likely your company will take off.
  4. How long will it be until you're profitable? Most businesses fail because they can't get a revenue stream large enough to support the founder's standard of living. How quickly can your company get to profitability? Is it a matter of days, weeks, months, or years? The longer it takes you to make some real money, the harder it will be to stay in business.
  5. Do you have help? It's nearly impossible for an individual to launch a successful company alone. Do you have the contacts and network to get your business off the ground? Are you familiar with the industry and the players who can get you launched quickly or do you have to build everything up from scratch? Can you leverage other people or are you forced to go it alone and do it all yourself? Having the right base around you can significantly reduce the time it will take you to become a success.

Evan is the blog manager for http://www.YoungEntrepreneur.com, the largest social networking forum for small business owners and entrepreneurs!

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Category: Managing Focus
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  • Mike Michalowicz

    “Do you have a customer?” – I couldn’t agree more. This is so often over looked and is literally the most important part of launching a business.

    I use a method I call the Formula of 5. For me to launch a new business, I need to ensure I can have $5M in revenue (aka do I have a customer), within 5 years, and currently have less than 5 direct competitors.

    - Mike

  • http://www.grippiesonline.com Corrie

    I have goosebumps now, as of Friday (our first big customer), GRiPPiES can check off everything on the list! Woohoo!

  • http://barfieldmanagement.com Chase Barfield

    Congrats Corrie!

    Evan – I agree with each point. And I believe them all to be important. I have launched businesses that were profitable but I fell out of love with them and the passion was gone. So I sold them off and kept the ones that I have deep passion for. It is great to make money. It is even better when you can make money doing what you love.

  • http://mindfrenzy.com/mindfrenzyblog/ Jared

    I think the 2nd point is the most important. You have to love what your doing. Isn’t that the point of being an entrepreneur?

    You start a business because you love it and that’s when all those hours of work don’t seem like work because your actually enjoying it.