Not every idea you for a business is going to be a good idea. Once you go through the market validation process you will find that many, if not the majority, of your ideas might not be ones that will make money.
Here are some ways to determine you have a good idea:
It solves a problem
Some of the best business ideas come out of problems or inefficiencies that you notice around your home or work. If you have the problem, then likely others have that problem as well.
It is enough of a problem that people will pay for a solution
There are a lot of problems that are so small that people will put up with them and will not pay for a solution. On the other extreme are problems that are important because they hurt a business’ ability to make money so they will gladly pay for a solution.
There are enough people with the problem
The number of people with the problem–your total market--are enough that you can build a profitable business by selling them the solution. Importantly you need to determine if you can reach that number of people. Geography, language, interests, etc. will limit the size or your total market.
The solution is one you can reasonably make
Some ideas are something that most of us cannot hope to accomplish. Few of us have the connections and resources to design and produce a new car. Many of us can learn to program to build a phone app or can start a lawn care or childcare business.
You can pitch it in an elevator
An elevator pitch is where you explain your idea to someone in thirty seconds (about the amount of time it takes to ride an elevator). If you cannot explain your idea in that amount of time in simple terms, then you cannot expect others to understand it and you likely have not defined your product or done enough market research.
You have a way to market the product
The best product is nothing if nobody knows about it. You need to have a clear and achievable way to market your product. At this stage, it is important that your marketing plan also be affordable. Content marketing on your website takes time and no money but you still will need a way to drive people to your website.
The problem is one you are dedicated to solving
This might be the most important characteristic of a good business idea. Is it something you can see yourself spending the next five to ten years of your life working on? If the answer is no, then you will struggle to find the motivation to go through all the challenges you will face. On the other hand, if you are passionate then you will do whatever it takes to make sure your business succeeds.
“The great entrepreneurs will figure out how to get around the wall, get over the wall, or knock the wall down. They don’t let anything get in their way.” – Steve Case (AOL)