Naperville Business Lawyer on the Importance of Vetting Your Business Idea

business idea, Naperville business law attorneysIf you are like most people, you have probably had an idea or two that made you stop and wonder if it could provide the foundation for a profitable business. Of course, only a small percentage people ever put their ideas into action. Those who build successful companies, however, do not take action until they are certain that a particular idea is worthwhile.

As a business law attorney, I understand the importance of carefully vetting a business idea before investing resources on building a company around it. I also realize that doing so takes time and patience, and I have helped many clients decide whether or not to start a business based on a specific idea. If you have a business concept in mind, you need to consider:

What Else is Out There?

Unless you are in a cutting-edge tech-based industry, there are very few totally unique business ideas. Chances are, someone else has thought of what you have in mind. That does not mean they have necessarily created a company built around the idea, but there may be articles, market research, and other resources available to help you determine whether there is a truly a market for your idea.

Can You Do It Better?

If you study the existing market and find other companies using ideas similar to yours, you will need to know if you can improve on how they are doing business. If so, your improvement will need to be substantial to attract the appropriate customer attention. Some experts recommend an improvement factor of at least ten to tip the scales in favor of implementing your idea. That means that you must determine that you can deliver ten times what existing companies offer because by the time your idea gets to market, many of your assumed advantages may be gone.

Who Is the Target Customer?

A good idea is not marketable unless there is someone—many people, hopefully—who is willing to spend money on it. Just because an idea appeals to you does not mean it will appeal to everyone else. You will need to identify your intended customers, including age, gender, income group, and a wide variety of other factors that tend to affect buying decisions. If possible, conduct market research or create mockups of your product or service to gather feedback from various demographics. Most importantly, find out how much they are willing to pay for it.

Can You Actually Deliver?

Did you know about half of all startups in the United States are out of business within five years? While such numbers are disappointing, there is no way that all of the failures were due to bad ideas. Many businesses fail because the owners were not prepared for the amount of time, energy, and commitment required to be successful. Before you build a company around your idea—no matter how good it may be—you need to understand your own limitations. Ambition and confidence are great, but overestimating your abilities to deliver your product or service could lead to financial ruin.

Let Us Help

At The Gierach Law Firm, we are equipped to help you determine whether your business idea is worthy of investment. Contact one of our experienced Naperville business attorneys to learn more. Call 630-756-1160 for a confidential consultation today.

 

Sources:

Entrepreneur

Fizzle

Small Business Administration