Earlier this week my best friend since we were two-year old blonde firecrackers lighting up our small town neighborhood shared a great business idea. She’s a graphic designer, creative thinker, super mom to an adorable little boy and has a full time corporate career. Always the more adventurous of us, it was only a matter of time before she found an outlet for her creativity. She had a great product idea designed to make parents’ lives easier.
In conducting a bit of marketing research with an informal focus group of friends about her product idea she covered several key points every want-to-be business owner must consider:
1) Have you ever seen anything similar to this and if so, where (what does the competitive landscape look like)?
2) Would you purchase this product for your own child (are you in my target audience like I think you are)?
3) Would you purchase this product as a birthday or Christmas gift (is this a product which I can expect loyal, repeat buyers)?
4) How much would you pay for this product (how much should I price this idea for)?
After giving thought to her initial email, I realized there were many components my creative friend missed that many budding entrepreneurs overlook before jumping into business.
What are my costs?
What is my time worth?
Can I charge enough for this product to cover my costs and make it worth my time?
If you’re working 24/7 in your business and not seeing a dime of profit, make sure you understand your costs. You may have a great idea, but if your costs are too high (aka it takes you too long to assemble what you sell, your materials costs are high, etc) your great idea may not be cut out to be a business.
And remember, being busy doesn’t mean you’re making money. If what you’re selling is truly your passion, keep that passion alive by undertanding your costs and charging what you’re worth.