Ideas are a dime a dozen, but sometimes there’s a hidden gem deserving of a chance.
If you’re an ideas person like me, you likely come up with great ideas for businesses on the fly. You know, the kind that solves a problem that exists in the world, or that you think will fill a need that is currently going unmet.
You might get these ideas by the dozen–in the moments before you drift off to sleep, or when you are washing dishes or while going for a run. But that does not mean that all of these ideas can be converted into business ideas.
Of course, some of them might be perfectly viable. But how do you tell them apart?
First of all, recognize that ideas are just ideas. In order to turn your business idea into reality, you need to start executing them. Once you settle on an idea to put in motion, you must then conduct market research of your target market, implement a good strategy, write a sound business plan, get the right space, and the right staff.
If you are looking to turn your idea into a functional, sustainable business, here are some tips to get your plans into motion.
1. Know what you are trying to accomplish
First of all, your idea needs to solve some kind of a problem or fill a need in order to be viable. What specific problem are you looking to eliminate? Take yourself out of your own shoes for a moment and try to be objective. If you were someone else, would you pay good money for this service?
2. Know your market
You need to have a clear image of who your target market is. What problem do they have that your product or service can solve? How much money do they have? Where do they live? How much education do they have? What do they do for a living? Are they single or do they have a family? How much disposable income do they have? Where and how will they use your product? Hold a focus group and write it all down.
3. Before you invest, create a prototype
Don’t go from idea to a full-fledged business. Build a minimum viable product or a prototype first. The prototype could be a presentation or a sample of the product you intend to produce. The idea is that you create something that potential customers can hold or experience, just to make sure that your idea will actually fly. It could potentially save you thousands of dollars if your product actually doesn’t end up doing well. You can also get people’s feedback and make changes to your product before you put it out on the market.
4. Make sure you have enough of a market to make your endeavor worthwhile
Ask yourself if your product caters to a large enough audience. Is your product going to be needed or desired by enough people to make it worthwhile? You don’t need something that everyone on the planet will want, but you do need enough of a customer base, or a recurring customer base, to make it worth your time.
5. Know where you will get funding or investors
Depending on the nature of your business, you may need start-up capital. Do you have some savings, or people who will invest in your business? Also, look for funding or government grants that will support new entrepreneurs and recent graduates. Check at your local economic development office, college, or university for more information. It will also be a good idea to get an accountant to do your taxes come tax time, as there are likely expenses you can write off.
Remember, not every idea has the potential to turn into a viable business. Know when you’re making steps in the right direction, and also if it’s time to cut your losses and move onto the next project. One of the best aspects of being an entrepreneur is that you gain knowledge and experience along the way.
Originally published on Inc.