Podcast Ep. 31: How to Know If You Have a Good Business Idea
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I hear it all the time, “How do I know if I have a good business idea?” “How do I know if something is going to stick?” “What ideas are worth pursuing?” Of course no one wants to invest time and money into a bad idea. So what can you do before you start your business to give you a little boost of confidence? That’s what I’m sharing in today’s episode.
TRANSCRIPT
I hear it all the time, “How do I know if I have a good business idea?” “How do I know if something is going to stick?” “What ideas are worth pursuing?” Of course no one wants to invest time and money into a bad idea. So what can you do before you start your business to give you a little boost of confidence? That’s what I’m sharing in today’s episode.
First a disclaimer: There is no way to truly know if you have a good business idea until you put it out there and see if people will pay for what you’re creating. That’s just the truth: The real test is when you ask people to put down their hard-earned cash to buy what you’re selling.
With that said, there are ways to do the work upfront so that you get a better sense of whether a business idea is worth pursuing. And it starts with these four things:
- Market Research
I’m not talking about reading trend reports or browsing glossy magazines or going into your competitor’s retail store – although those are all good things to do. When I talk about market research, I want you to find the actual words and phrases that your ideal customer is using to talk about the clothes they want and buy.
To do this, I want you to start looking at your competitors’ Instagram accounts. Identify the top 5 brands that you would identify as your future competitor (the bigger the audience the better) and browse through the comments on their posts, reels and videos. What are their customers saying about their clothes? What are they complaining about? Which posts feature garments that get the most likes, comments and reactions? What phrases, words or even emojis are their customers using to talk about the products that may be similar to what you’re creating?
And then I want you to do the same thing on Amazon or the product pages of some of the bigger brands. Look at the five and four star reviews for what people are loving about the fit, fabrics, design, functionality, colors, etc. and look at the 1 and 2 and 3 star reviews for what people are disappointed by, criticisms, critiques and what they were really looking for in the garment.
Browsing the reviews and feedback of your competitors can be a gold mine of market research, information and ways to make your brand and products better.
2. The second way to know if you have a good business idea is to Talk to Your Ideal Target Customer
First, of course, you have to identify who you think this person is and there are many different ways to do that, but once you figure it out you need to have real conversations – yes, like IRL. Or at least on FaceTime or Zoom.
This takes effort – what person under the age of 45 wants to actually pick up the phone and have a non-texting conversation? – but it is so important to be able to hear the words and see the facial expressions when talking to your ideal customer.
So set up the time – most people are willing to help an aspiring entrepreneur – and ask questions that relate back to your idea and what you want to create so you can learn what your potential customer is looking for in the product you’re making and the brand you’re building.
Listen, record and take notes so you can write down the exact phrases they’re using to describe the problem they’re having and the solution you want to provide them.
3. The second way to identify if you have a good business idea is to ask yourself: Do you have a Unique Selling Position?
This is your USP. In other words, how are you going to stand out in a crowded market? What makes your product or brand different from the competitors I mentioned earlier. It’s no secret that the fashion landscape is crowded, so you need to really ask yourself what it is about your idea that is unique. Why would someone buy from you instead of another similar brand on the market? When you’re able to come up with a really solid answer to this question then that’s when you’ll know you’re onto something.
4. And finally, ask yourself, Are you Solving a Problem?
The problem your brand, product or collection is solving needs to be more than “people need to wear clothes.” Obviously. But it doesn’t need to be groundbreaking or a unique invention necessarily.
Can you identify what problem you’re solving for your ideal target customer and explain it in a way that is at least slightly different from your competitors? Here are some examples of past brands that have launched through Factory45:
Pure Colour Baby is a childrenswear brand made from organic fabrics. Because the price point of organic cotton is on the higher side, and most parents don’t want to buy expensive clothing that their baby will grow out of in three months, Pure Colour Baby designs their clothing based on grow-with-me sizing – this allows the garment to span across 6-18 months of sizing rather than three and their customers get much more use per wear.
Wandwoods is a Factory45 graduate that creates cottagecore garments. Cottagecore is an aesthetic that celebrates simple living, particularly in the countryside., and has been rapidly growing in popularity. Wandwoods offers garments for those people who are looking for peasant dresses, full skirts, puffed sleeves and natural fabrics that romanticize rural living.
Another Factory45 alum, who is also one of our Mentors in the program, is Kendall Wilson who runs Vesta Studio. She’s solving a problem for people who identify as vegan and choose not to wear any animal products. She uses only sustainable, vegan fabrics in all of her collections.
So that’s it – once you identify those four things and take action on getting answers, you’ll have a much better understanding of whether you have a good business idea or not.
And when you do figure that out, book a free discovery call with us to explore if Factory45 is the right fit for you. We’d love to help you bring your sustainable fashion brand to life. You can go to http://factory45.co to learn more. Thanks for listening and see you next week!
