Every entrepreneur has had multiple ideas in their lifetime, often at the same time. How do you choose which is the right one for you? As an entrepreneur you may have many great ideas but you may not be sure which one is best-suited to base your startup upon and which will have the most financial success. Whether launching a product or service, the most vital factors that you should examine include demand, margins, finance and feasibility.
Offering a solution
If you want to offer a product or service that offers a solution to a problem then you will need to focus on who your audience is and gain an in-depth understanding of whether what you're trying to do is viable. Whether or not this idea is the one you should choose for your startup depends upon whether you can ensure that there is really demand for your product, and that your solution will have a long-term lifespan.
Testing your idea
To determine how successful your idea will be and which idea would work out best, it is essential to test out your idea on the basis of model, market and concept. You need to ensure that the product or service is easy to launch. If the idea is too complex or you find you cannot roll out a trial product without significant expenses that you just cannot finance or difficulties that you cannot resolve, you may need to think again. Your idea needs to be executable from inception. Also be aware that because it's an idea, it may need to be altered and changed as you go along. Therefore another factor to take into account is financing. You need to be sure you have the funding to take the idea all the way to the end goal.
Providing a service or product that is a repeat buy
This is a very important criteria for your success. You want to make sure that your startup's success is not based upon a one-time offering. To guarantee long-term business success you need an idea that will ensure your clients come back again and again. For example, it may be better to have a pool cleaning company than a pool building company. When thinking about which idea to choose, focus not on the one that gets business from a customer once, but the idea that ensures you will make a profit from your customers for a very long time.
Ensure your profit margin will be high
If you are trying to choose between multiple ideas make sure you pick the most lucrative and the one where you can attract the most funding. It is very difficult to make a long-term profit by offering a service or product based on the idea "we are cheaper". As a startup you will need to watch your cash flow and you must ensure you have a high level of working capital to keep you afloat through the initial phases and an offering that can begin to generate income from early on. Having a higher margin is crucial when you're launching a startup as it means you can self-finance your growth and expand over time.
