Validating Your Idea
Your pondering starting a new business or your looking to add a product or service to your existing business model. You have a great idea that you think the world will fall head over heals for. But do you know how many other have pondered the idea of starting a business of the same type or adding the same type of product or service? An impressive rate as more than 540,000 new businesses are being started each month. So what do you think your rate of competition will be for your better mouse trap?
Approximately 543,000 new businesses get started each month (but more employer businesses shut down than start up each month)
Seven out of ten new employer firms survive at least two years, half at least five years, a third at least ten years and a quarter stay in business fifteen years or more.
Source: U.S. Census Bureau, SUSB, CPS; International Trade Administration; Bureau of Labor Statistics, BED; Advocacy-funded research, Small Business GDP: Update 2002- 2010, www.sba.gov/advocacy/7540/42371. In 2010 there were 27.9 million small businesses, and 18,500 firms with 500 employees or more. (U.S. Census is rendered every ten years)
This number is growing continuously every year, and offset by those businesses that close their doors due to various reasons.
Here are some beginning steps to validate your idea.
- Who cares after one years. Many products are linked to fades and trends, and have a life time of an earthquake. They shake things up, but there sticking power in the market is short lived. And the time it take to clean up the failure rate is staggering.
- Take the time and so a deep market analysis of who your competitors REALLY are.
- How similar is this products or service?
- What is the market saturation, i.e. how many other companies are selling this same type of product or service?
- How is yours different, and what are the attributes that set you apart from your competitors?
- Do you have the skills, and education to run a business? Just because you worked for an organization that does something similar, doesn’t mean being mad at your old boss is going to make your business a success.
Three Vital Books You Should Read To Validate Your Ideas