Many people have new business ideas in their pockets.
Whether you want to monetize your hobby jewelry making or sell it to an expanding niche market, those reading this article have probably enjoyed envisioning their full-time business ( or side business ). must.
But what many don’t have is the confidence that they ” know that their ideas are good .” A clear opportunity to spend time and money, that’s a great idea.
For those of you who aren’t very sure about your ideas (or have too many ideas to choose from), here are some important questions to consider. Use it to gain a foothold and realize your ideas.
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What Determines And Realizes Good New Business Ideas?
A good “new business idea” is more than just an “idea”. It’s a well-planned “opportunity” that allows you to grow your customer base while increasing revenue and scale.
The following questions will allow you to develop your business ideas into “obvious opportunities.”
- What type of entrepreneur are you?
- Who are you selling to?
- What is the profitability of the business idea?
- Is there a repeatable way to get customers?
What Type Of Entrepreneur Are You?
Starting a business is easy. But to continue a profitable business, you need a commitment.
Each person has different strengths, weaknesses, and interests. As an entrepreneur, it’s important to understand yourself. What motivates you when you get stuck (always coming)?
Some people are motivated to create a business structure and provide value. For them, revenue is a way to keep working. Some people say that challenges, pain points, passions, etc. are the driving force. They put themselves in the same position as their customers, and it’s their greatest pleasure for people to use their products.
The following questions will help you understand your entrepreneurial mindset and connect it with your business ideas.
- Do you have strong opinions, expertise, stories, etc. related to the product category?
- Do you have the important skills to fit your ideas? Do you have a salesperson who is good at selling to retailers, has a design background that can contribute to brand design, or knows how to outsource even if you are not good at it?
- Do you make a personal investment in the problem or area of interest you are trying to solve? This isn’t required, but it definitely helps!
- Can I create content (on social media accounts, YouTube channels, email lists, etc.) to grow my audience online? In recent years, entrepreneurs have built an enthusiastic audience first, and this audience is at the core of the business that develops afterward.
Who Are You Selling To?
In order to realize a new business idea, it is necessary to understand the appropriate market.
A good business idea is to be able to answer the following questions clearly.
Who is most likely to buy from you, even if it is the least persuasive? Who are already spending on similar products and what is the quality they require?
To better understand the people you do business with, you can do the following:
- Perform competitive analysis on other companies in the same area. SimilarWeb is a useful tool for website traffic analysis of related businesses.
- Analyze marketplaces such as Etsy, Amazon and Rakuten Ichiba where similar products have already been purchased to understand the market size and decide how to sell to potential customers.
- Get a deeper understanding of their needs and hopes through prospect surveys and interviews.
- Investigate potential crowds, such as Reddit, the Facebook community, and industry blogs.
- Research industry trends using sites such as Statista and Facebook IQ.
- Use keyword research to find out about business opportunities from Google search trends.
Clearly defining opportunities and audiences will make it easier to build initial sales and make it easier to get the fruits you want to get first and then pursue the rest of your profits.
Take Satya Organic Skin Care as an example. A company that sells organic eczema cream. Let’s see how research can give you an overall picture of the entry market.
- According to the National Eczema Association, 31.6 million Americans have eczema.
- As a result of keyword research, it was found that there are an estimated 27,000 monthly searches for “eczema cream”.
- Eczema subreddit has about 35,000 members.
When you start a business and start acquiring customers, you get a lot of feedback that you can incorporate and apply. You may also want to change the content of your message to increase the empathy of your potential customers.
What Is The Profitability Of The Idea?
As long as you take the time to work on it, your business will not be successful without sufficient profitability. But profitability is a bit more complicated than it’s okay if you deduct expenses from your sales to make a profit.
Let’s say you sell an original seasoning for 2,000 yen per bottle. In shipping and manufacturing 500 With such yen, 1 earnings per this is 1,500 yen. This doesn’t mean that you have enough money to acquire customers, and you need to consider other expenses as a matter of course.
The good news here is that there are many things you can do to increase your bottom line, including:
- Product price increase (the easiest way to understand)
- Sell multiple products at once to raise the average purchase price
- Bulk sale for retailers
- Encourage repeat purchases for past customers (marketing to existing customers is cost-effective)
- In order to facilitate the repeat, order provides a subscription to
- Add new products, profitable services, etc. that can be sold to the same audience
When examining the feasibility of a business idea, also consider the interaction of the following factors:
- Break-even point: The break-even point is the point where sales can at least cover costs such as warehouses and inventories. It can be calculated by the following formula. Break Even sales = fixed costs ÷ {( sales – variable costs ) ÷ Sales }
- Repeat purchase rate: Is there a possibility that the customer will purchase another product again? (For example, if it’s a mattress, it’s unlikely)
- Customer Lifetime Value: What is the total revenue you can expect from an average customer?
- Acceptable Customer Acquisition Costs: What is a reasonable amount of money you can spend to acquire new customers? The higher the customer lifetime value, the more money you can spend on new acquisition costs and the less (or zero) profit you can get from your first order.
For a good business idea, the profits from the customer base are much greater than the cost of acquiring customers.
Is There a Repeatable Way To Acquire Customers?
A healthy business has a repeat sales approach and a new acquisition process that fosters potential customers and encourages existing customers to repurchase.
The keyword is “repeated process”. This process can also be automated, with configuration and rationalization, and works in your background like an anointed machine.
Boosting traffic with Facebook ads and Instagram posts could be the cogwheel of this machine. But be careful not to confuse these tactics with the “machine itself”. Gears that do not mesh can just spin idle.
To avoid making such mistakes, consider the various marketing opportunities that surround your business idea.
Is the market where product searches are performed?
Use keyword research to estimate how many people are searching for the problem or product you are trying to solve. If you have a lot of demand, you can invest in search engine marketing to increase your exposure in search results to those who are willing to buy.
Are there any retailers or other companies interested in wholesale your merchandise?
It is conceivable to create a dedicated wholesale page on the site. Or provide samples, gifts, custom orders, etc. to let them know that there are wholesale options and how to access them.
Can you find influencers (creators), bloggers, events, etc. with an audience that is likely to be a customer?
Building a community gives your business a long-term advantage, but you can also take steps to find potential partners and leverage their audience.
Can I offer discounts, free gifts, downloads, etc. to pull in my email list?
Obtaining an email address is the second most important achievement after purchasing. Because it allows you to communicate with potential customers for free. When guiding traffic to your site, you can make better use of your marketing budget by preparing measures for audiences who are not yet willing to buy.
Is it likely that users will create content that uses your product?
If your product is suitable for sharing (eg, Instagram), you can promote the sharing loop by e-mail after purchase to further increase new reach and sales.
Basically, all of these aren’t known at once, but it’s quite helpful to consider the sales and marketing options that apply to your business idea.
Also Read : How To Make And Sell Original Goods Online