Brower: The big question: Will my business idea succeed?
Grand Enterprise Initiative
Most often the very first two questions I hear when people approach me about a new business idea is this: Do you think this is a good idea? Will it succeed?
To which I always reflect upon one of my favorite Yogi Berra Yogi-isms: “It’s tough to make predictions, especially about the future.”
Which applies directly to the essence of this obvious, logical and impossible-to-answer question. It’s frequently the very first question that shoots through my head when people approach me with an idea for a new business or business expansion. But I have learned over the years that it’s not the best question to ponder initially.
A wide range of circumstances frequently determine the success of a business. There are gazillions of great business ideas out there, many of which would succeed under the right conditions. It’s those conditions and circumstances that are the most important thing to consider if a person has a business idea.
But first and foremost, I try to understand if the person with the idea likes the idea enough to want to persevere through the process of getting the idea on the market. For example, other people had the idea to create a “social media” platform before Mark Zuckerberg. But the timing and circumstances of how they executed that idea clearly weren’t up to the computer skill level and level of luck that Zuckerberg was able to capitalize on.
He clearly liked the idea enough to come up with some code that backed a web page that made it so easy to share and link with friends. But first and foremost, he liked it. It wasn’t totally clear to him initially how or even if he’d make money at it. He just liked the concept enough to work through the kinks of implementing it. And obviously, the market was ready for his idea, but not even he expected the level to which it was ready.
Sometimes when people ask if an idea is good they’re really asking if I think there’s enough of a market to support or fund the business idea they have. Will I sell enough coffee? Will enough people want to buy my pizzas? Etcetera. Frequently under those conditions a person can look around and see many coffee shops and many pizza parlors and make a rash conclusion that there are already too many of those businesses.
But I will say that over the years I’ve been surprised at how flexible and expansive our local markets can be. But no matter what, there won’t be much of a market for the first two or three years no matter how great the idea. It simply takes time for a business to start making money so the owner better like the business for those tough times.
There are tools out there to evaluate a market. One of the most common is the market gap analysis, which theoretically assesses and identifies products or services that are lacking in a market, therefore pinpointing the goods or services that could sell well.
But most of these sorts of analyses fall short in places like Grand County that are close to other major markets (Denver and Silverthorne) and which have hard-to-measure visitor and tourist markets that completely skew the numbers for certain items and services. In other words, I’ve seen market gap analyses for places in Grand County that would have, simply, pushed someone toward a business idea that would struggle.
I tell people that the market will tell them, once they get going, if the idea will really work. It’s that difficult and simple.
First, they should like the idea. Second, they need to remember that it’s tough to make predictions, especially about the future.
Patrick Brower is the Enterprise Facilitator for the Grand Enterprise Initiative. He offers free and confidential business management coaching to anyone who wants to start or expand a business in Grand County. He can be reached by calling 970-531-0632 or at email@example.com.
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Ghosts, and goblins, and ghouls, oh my!