How To Refine Your Business Idea

Many people have business ideas that arise from their everyday experiences. However, it‘s important to refine your business ideas and test them before investing time and money into executing it. Here are a few things to consider before jumping in:

Refining your business idea involves looking at in from various angles.

What Problem Does Your Business Idea Solve?

Identifying a good business idea can be challenging, but there are several ways to help you get started. One approach is to look for problems to solve. Think about the challenges or problems that you or other people face in your daily life. Is your ideas a solution to solve these problems? There may be a business opportunity in creating a product or service that addresses these challenges. It's also important to consider your skills and expertise. What skills or knowledge do you have that could be turned into a business? Think about your professional experience, education, or hobbies that you have developed skills in. This approach may help you leverage your existing knowledge and skills to start a new business.

It’s also important to think about longevity of your business. This is particularly important in technology related markets where industry disruptions happen often and quickly. If there is a technology change coming up, it’s important to evaluate the risks of becoming irrelevant too quickly or moving your operations into a different direction.

Who Is It For?

Who are going to be the majority of people or organisations purchasing your products or services? Do they see the problems you want to solve as something they would pay to get resolved? It’s extremely important to speak to people who are your target market. Ideally, find people who are encountering the problems you are trying to resolve and carry out interviews, focus groups and surveys. You may find it helpful to use online resources such as Facebook Groups or Reddit discussions to ask questions and collect information.

Not defining a target audience is a mistake many new businesses do and it results in loss of focus in the marketing strategy. The more you know about your potential consumers, the easier it is going to be to understand their needs, recourses and expectations.

Is It Commercially Viable?

Research market trends and competition in the market you’re about to enter. Look for emerging trends and growing markets in industries that interest you. Are there gaps in the market that you could fill with your new product or service? This approach may help you identify business opportunities that are both innovative and profitable. Finally, talking to others can also help you identify potential business flaws and opportunities. Talk to friends, family, and colleagues about potential business ideas. They may be able to offer insights or suggestions that you haven't considered.

Consider your price points and costs of operations. Make sure to include any hidden costs such as shipping when calculating the viability of the business. Work out the price per unit and don’t forget about the cost of time. When you are starting out it may be lucrative to think that your time costs nothing, especially if you are starting a new business as a side hustle in your free time. However, it is important to remember that as you scale up you will need to start paying people to help you fulfil the orders or give up your main job and get paid for your time.

While it is OK to have some early-bird offers, and initial discounts, the price of the products or services you offer needs to cover all of your costs going forward. The best way to calculate this is to start a spreadsheet and imitate the process of ordering all the materials and services needed to produce a batch of products or a session of services.

Always add an extra margin to help you cope with any unexpected delays, issues or mistakes. Make sure you are covered if you need to use a slightly more expensive supplier or if your current materials go out of production and you need to innovate.

Include realistic budgets for professional costs such as accounting, marketing, legal advice, permits and certifications. They will depend on your location and industry.

How Will You Compete?

It is very unlikely that your business idea is something completely innovative and that’s perfectly OK. Most industries have various levels of saturation when it comes to the products and services on offer.

There are various ways you can compete even in markets which are saturated. You can do this by competing on one of the following categories: quality, price or speed. It’s usually not viable to compete on all 3, so you will need to choose your approach depending on your brand. If you are building a luxury brand, you will want to offer the best quality. Occasionally, this will also mean being the fastest, or having the best customer service. If you are building a convenience brand, speed and price are most likely to be the key focus, with quality often taking a back seat. Remember, it’s all about what your target market wants and that’s why it is crucial to write down all parameters that will define them.

For example, people who want to grab a burger at a takeaway will be vastly different from people who go to have a gourmet wagyu burger in a high end restaurant. Both places sell burgers, but at very different price points, delivery timescales and quality standards. Both are viable business options, but appeal to different target markets.

Your additional unique selling points (USPs) may include elements such as innovation, design, safety, wellbeing, lifestyle and sustainability to name a few. For a burger, innovation may be a new sauce or side that is only available at your restaurant. Wellbeing fans may want a low-fat burger, sustainability enthusiasts may want to know it has been sourced locally/responsibly. You don’t need to tik all of the boxes all of the time, but identifying what your consumers value is essential in making your business a success.

With time, new trends and values emerge, so it’s important to keep an eye on the changes in the industry and actions of your competition. By re-evaluating your offering and continuously learning and improving, your business will remain relevant for years to come.

What Will Your Brand Identity Be?

To describe your brand identity, it is important that you are clear about what visual style and tone of communication you will use to connect with your target market. To build a community of loyal customers and supporters who will purchase from you repeatedly, or refer you to others, your business needs to be consistent in its marketing and communication. This is something that is very important to establish before you begin, as rebranding is an expensive, time consuming and sometimes destabilising process.

While you don’t need to remain loyal to your logo and slogan for the rest of the business existence and you will most certainly make gradual changes as your business grows and transforms, having a well curated brand at the beginning will help you launch your products and services quicker and attract the critical mass of customers to make it viable.

Having a strong brand presence will also help your products and services stand out from the crowd and highlight your USPs. People are attracted to aesthetically pleasing well put together brands with a voice that has a character. Whether you go for a friendly or cheeky tone, it’s important that you can maintain it across all communication platforms and don’t divert to dry, boring professional style with no soul.