Tuesday, May 20, 2008

How Do You Know When You Have A Good Business Idea?

Mark Cuban, the billionaire owner of the Dallas Mavericks, once said that he knows when he's on to a good idea when everyone in the room disagrees with him. He feels that if no one else can see the logic in his idea, then this proves how revolutionary and original his concepts must be.

Many entrepreneurs, however, are quite the opposite. They feel they've discovered a good business idea when everyone around them agrees with them. To them, when everyone can see the logic - this means that they are on to something.

In all actuality though, you will never know for sure if you have a good idea until you actually pursue it. It doesn't matter how many people agree or disagree with you. Only time will tell.

There are, however, some ways to determine whether or not your idea is realistic. Of course, if your idea is not realistic - then its not a good idea. Here are 3 intriguing questions to ask yourself:

1) Can my idea be easily duplicated? Understand that you can patent a product, but not a service. If you come up with a unique service, you have to consider whether or not people can steal that concept from you.

For instance, I remember having a conversation with a friend who had an idea about opening a unique store for women. She felt that whenever she went shopping for clothes, she could never find the right size - they would either be too small or too big. So she wanted to open a store with all half sizes (6 1/2, 7 1/2, and so on). Well, it wasn't a bad idea. However, if she pursued this and it became really successful - every clothing store nationwide would catch on and do the same thing.

Her idea was way too easy to be duplicated, and it would have backfired in her face if she went forward with it.

2) How will I market my idea? I know tons of people with great ideas, but when I ask how they will market it - they get extremely quiet. Promoting a unique invention nationally costs money. Do you have those funds? Do you know how to raise capital? What about distribution? How will you get it into the stores? Will you sell online? Do you even know how that works? Be cautious about making the very costly and common mistake of creating a product, with little or no knowledge on how to let people know it exists.

3) Will I be able to compete with bigger companies? Keep in mind that patent protection doesn't last forever. Eventually (usually after 10 years), your patent for your product will expire and you can not renew it. This means that other companies can come and take your idea. Will you be able to compete with them when this happens? Have you even considered this? If you don't think you can handle this, then your business idea is probably not a good one.

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