Despite the many challenges brought on by COVID-19, Canadian entrepreneurship, business innovation and optimism have remained strong. Canadians are challenging themselves, seizing opportunities, and starting their own businesses. In our #GetStarted series, we provide practical tips, debunk common myths and call on experts to help prospective entrepreneurs take the leap from idea to action.
Wondering if your idea has the legs to turn into a viable business? Curious to know if other people will find it as compelling as you do? Searching for some validation before quitting your day job? In conversation with business coach Shelagh Cummins, Founder of The Road to Seven, we learned five questions new entrepreneurs should ask themselves – and the steps they can take to find the answers.
1) Is anybody else doing this?
One of the very first things to look at when considering the viability of your business idea is to see if someone else already has a similar product or service in the market. A simple online search will be able to tell you what’s out there today.
And if someone does already have the idea, your next question is: “How am I going to be different?”
“A lot of people look at potential competition and wonder how they’ll be better. But I think that’s a dangerous way of looking at it,” says Cummins. “If I want a fast food burger, I could choose between many different options – and it’s not that one is necessarily better than the other, but each has different flavours, toppings, speed, quality, etc. The difference in your business is what’s going to attract the right people to you.”
2) What problem will my idea solve?
A significant number of entrepreneurs started their business out of a need they had – they had a specific problem but couldn’t find an existing solution. In finding other people with similar problems, entrepreneurs formed successful ventures.
So what problem is your idea going to solve?
“When you can articulate the problem you’re going to solve for people, you’re 50% of the way there,” says Cummins.
You can then take things one step further and identify how solving that problem will make someone’s life better.
“For example, if the problem is that there are no good blue pens out there, you can solve it not only by developing the perfect blue pen, but by talking to the customer about what that blue pen can help them accomplish. It could be the blue pen that helps them finish their book, build their profile and grow their business.”
Understanding how your idea could be a gateway to greater impact can help you determine its potential power.
3) Who needs this problem solved?
A big step toward understanding the potential of your idea is to get validation from others. The key, explains Cummins, is to get that validation from the right people.
“At this stage, you need to be careful about who you’re talking to. If you ask: ‘Is this a good idea?’ to someone who doesn’t have the problem you’re addressing, chances are they’ll say no,” says Cummins.
Once you identify the problem you want to solve, it’s important to present your idea to the people who have that problem. In doing so, try to look for diversity in age, background, beliefs and needs to get a broad range of perspectives. You’ll start to see very quickly who your niche is going to be and how you’ll eventually want to market to them.
4) What do these people really think about my idea?
You’ve identified the problem and your target customer – now, it’s important to get specific feedback about your idea from your prospective customers.The best way to do this is to create your MVP – Minimum Viable Product – and get it in front of your audience. This is particularly valuable when launching a product, given the upfront costs involved. Instead of making 10,000 units and finding out your product is not quite right, it’s wise to make a prototype, let people test it, and assess the impact it has on them. When launching a service, you can get a handful of people to experience the process.Then, you ask the hard questions.“You want to get honest feedback from the testers and be OK with not getting all roses and unicorns back,” says Cummins. “Make it safe for people to be honest. For instance, say: ‘Give me the good, the bad and the ugly’ and reassure them that they’re not going to hurt your feelings.You need to know the straight goods so that you can fix things before going to market– it’s the constructive feedback that will provide you with the most value.You can also test the market through social channels, given their low barrier to entry. “Connect to people who are ideal customers and share content that speaks to their desires and problems. This is a great way to test your idea,” says Cummins.
5) What impact will my idea have?
This is perhaps the most important question of them all, as it’s really the results of your idea that matter – and it’s your passion about those results that will sustain you through the ups and downs of owning a business.
When your business is rooted in meaning, purpose and impact – and your motivation extends beyond simply making a sale – not only will you be that much more committed to your business, but your customers will be that much more connected to it.
“The businesses that are thriving right now are the ones that are doing something for societal good,” reminds Cummins. “The impact of your idea is what will matter to your customers and ought to be the driver behind the steps you take to turn your idea into reality.”
As you work through answering these questions about your idea, keep in mind that you don’t need to do it alone. There are many free or low-cost services that support entrepreneurs just starting out, including Futurpreneur, your provincial government small business hub like Small Business Ontario, Start-Up Canada and MaRS. And, by joining networks and communities of like-minded people, you can meet people who will not only champion you, but challenge you.
Defining and refining your idea is arguably the most exciting – and stressful – part of starting a business. The key is to be open to feedback, willing to change course and root your business idea in a purpose that transcends the challenges you may face as you get it off the ground.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.