Does it have legs? 3 things to ask yourself before you quit your day job

By Lighthouse Business Innovation Centre .

With many Australians considering launching a small business each year, it’s important that they give their business idea a once over before embarking on their entrepreneurial journey.

1. Does the business idea satisfy a compelling unserved need?

Finding an idea worth pursuing is about working out who wants what you’re offering so badly that they’ll buy it even if it’s an early version made by a start-up without a proven track record.

Identifying the intensity of the need and the inability of your potential market to solve the problem gives you an idea of the likely demand there will be for your offering. But before you print those business cards, you still need to consider how many people this is important to and work out whether there are enough of them to build a business around.

2. What is the risk of failure? 

Sometimes even with a compelling need, the risks outweigh the opportunities and an idea is best shelved until the market is more receptive to it. It’s important to look at things like changing trends, the impact of socio-economic and regulatory factors as well as dependence on outside resources before deciding to proceed. Very often these risks can be managed, but it’s better to understand what they are from the outset rather than hit an iceberg a couple of months in.

3. How will the business make money?

Having a business model that makes sense often takes a lot of thought and planning. You need to have a good understanding of the resources you will need to operate the business as well as the profitability of your products and services. Many companies have to re-visit their business model a few times before getting it right.

When you launch a new business you’re putting a lot on the line – your money, your time, your reputation and very often your relationships, so it’s important to give yourself the best chance of success. Investing the time upfront to refine your idea and improve areas of weakness can save you a lot of heartache down the track.

If you need some help evaluating your business idea, Lighthouse Business Innovation Centre  has developed an online tool that draws on extensive research and input from business facilitators, researchers and subject experts as well as the hundreds of start-ups who work with Lighthouse to commercialise their ideas. You can view the tool at www.bizlabtool.com.au .

Lighthouse Business Innovation Centre is a joint initiative between the ACT Government and Epicorp Limited. Lighthouse can provide you with advice, education and training, mentorship and networking opportunities to help commercialise your idea and grow your business.