How to develop your business idea
Does your idea have the potential to translate into a successful business? Before you take the leap, you'll want to know that your business idea is likely to return profits that will help you achieve your goals. Following these six steps could help improve the chances of this.
1. Do customers want it?
Once you have an idea, you should work out if there's actually demand for it. Some ways you can gauge this include:
- Looking into Google Trends or Google AdWords to check if customers are actively searching for your business terms
- Reviewing comments on social media platforms to gather customer insights
- Asking family, friends and co-workers if they would pay for it
2. Can you make a profit?
Completing a financial plan will help you estimate whether your revenue will be higher than your overall costs. It can show you set-up costs, how many items you need to sell to make a profit and any potential cash shortfalls. This plan will also be handy if you are looking to borrow funds as it is likely to be one of the documents that lenders ask for.
3. Research the industry
Your success in realising your business idea can be impacted by things out of your control, so it's important to be aware of current and future developments that could affect its viability. Keep on top of any changes and trends in your potential industry by researching online, staying on top of any news and reading industry-specific publications. Think about the long-term outlook of the industry, technology landscape and consumer demand. Statistics New Zealand has a wide range of online consumer and industry information that can help.
4. Test your idea
Can you test your idea with a small investment? Consider, for example, making a prototype to send to potential customers or offer the service to close friends and families. The feedback you receive can help you decide if there is demand for your idea and what ways you can further improve your product or service before going to market.
5. Make sure it fits you
A good business idea isn't just a plan to make a profit, it's also one that fits your lifestyle. Starting a business can take a lot of your time and energy, so make sure you choose an idea that matches your interests and strengths.
6. Trade mark it
If you have an innovative idea with potential to be a first of its kind, you may want to consider protecting your rights by registering a trade mark for it.
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This page is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and should not be relied on. This information has been prepared without considering your objectives, financial situation or needs. We recommend you seek independent professional advice and contact Inland Revenue before acting on this information.
