Business ideas: How do you know when it’s the real deal?

I knew that with faith and a lot of hard work that I could make a real impact – even at 22!

When I set up my first company, The Cobra Group, in Sydney at the age of 22, I had no way of knowing that it would develop, expand and metamorphose a few times into the international organisation it is today. I always had faith in my ideas though and I knew that as long as I worked hard and drew on all my skills, I would be able to put myself in a strong position for business success.

If you’re just starting out as an entrepreneur and you’re not sure if your business idea is the real deal, it’s worth asking yourself the following questions. They could make it easier to identify the strengths, as well as potential weaknesses, of your concept and help you to decide if it’s really worth pursuing.

Are you meeting a need?

One of the first things you should consider is whether your product or service is meeting a genuine need. The best business ideas solve problems or present people with something new and compelling that enriches their lives.

You should have a clear idea of exactly who your company is targeting and what it is about your product or service specifically that will appeal to them. It may be that you’re going after a very niche market. There’s nothing wrong with this, but you’ll need to factor in the size of your potential customer base when you’re making projections about demand and future sales levels.

Always bear in mind that, if other businesses are already offering very similar things and you’re not bringing anything particularly new to the market, you could find it tough to get market cut-through.

Are you getting positive feedback?

You’re bound to be positive about your idea, but what do other people think about it? It can be hard to hear people’s honest impressions about your business concept – especially if it’s something you’ve put a lot of work into and you hold close to your heart. But it’s essential that you canvass opinion on your business idea and plan before you invest too much time and money in it. This means doing plenty of market research.

A good business idea should start to generate excitement and anticipation early on. So, even if you’re emotionally invested in the project, if you’re struggling to win over would-be customers, it’s important to realise (early!) that there may be a problem with your plan.

Can you explain your idea clearly and concisely?

The elevator pitch became a cliché because it’s true. Even if you’re developing a complex product or service, you should be able to explain the basic idea clearly and concisely. If you find yourself waffling when you try to sum up your concept, it could be that it’s still too complicated and needs further refining.

Also, bear in mind that you’ll need to win over customers and possibly also investors in order to make your venture a success. You won’t be able to do this unless you can present your idea in a simple and compelling way.

Launching a new business always takes a leap of faith, but asking yourself questions like these can reduce some of the uncertainty – first and foremost, in your own mind.

What lessons can businesses learn from the launch of the new pound coin?

They might have come into circulation in the UK in late March, but the new bimetallic 12-sided one pound coins still get my attention each time I have one in my hand.

The coins, complete with their distinctive new look and series of security features – including grooved edges and a high-tech hologram – got me thinking about the lessons businesses can learn from their launch.

Although switching from one coin to another might not seem like a big deal, it does draw attention to a range of issues that all companies should think carefully about. Here are a couple of the most important lessons I think businesses can learn.

It pays to plan ahead

Forward planning is vital in any business, and this includes paying attention to any upcoming developments that could affect your day-to-day operations. If you don’t put effective measures in place to help your company cope with any imminent changes, you could be left counting the cost – and your reputation may be damaged as well.

Highlighting this fact, some businesses seemed to be caught off guard when the new pound coin was first launched. Around the country, a range of ticket and vending machines, as well as supermarket trolleys, weren’t adapted to accept the new coins.

In fact, according to the Automatic Vending Association (AVA), around 15 per cent of the UK’s vending machines were initially unable to accept the replacement coins. This may have resulted in countless missed sales opportunities. Tesco was one of the supermarkets hit. It had to leave trolleys at some of its larger stores unlocked while it updated its locking mechanisms to accept the new coins.

There’s a risk that any long-term strategic planning will end up taking a back seat – especially when you’re under pressure to meet demand for your products or services and you have other important priorities to focus on. But if you want to ensure your company is ready for whatever lies ahead, it’s essential to devote time and energy to future proofing your strategies on an ongoing basis.

Factor your finances into any change

The launch of the coin also reinforced the importance of factoring your finances into any changes or enhancements you introduce in your business. Treasury assessments of the economic impact of the introduction of new 5p and 10p coins in 2011 suggest that it cost the coin-operated industry approximately £80 million.

This time round, the figures are likely to be even higher. The British Parking Association states that it can cost up to £130 per machine for a software upgrade, while hardware changes can come with a bill of £350 per machine. The AVA estimates that it will cost companies a combined total of around £32 million to upgrade the UK’s 500,000 vending machines.

It may not be easy, but creating a financial cushion around the implementation of any new idea will help you cope with expenses like these. In turn, it could increase your chances of securing the long-term success of your business – and it means you can enjoy greater peace of mind.