A good idea versus a good business idea

Not all ideas are good business ideas. There are many ideas out there and not all of these ideas make business sense. It is very important that your ideas be evaluated from a business perspective and not just from the view point that this is a good idea thus it must be a good business idea. New entrepreneurs often focus on the idea itself and not on the business of the idea. An idea it just that an idea, but in the case of a business idea it is one that delivers the ability for the entrepreneur to earn money from the idea for a long period of time. So a good business idea should have the ability to generate wealth, providing profits, sustainability and longevity.

Even those entrepreneurs that have a good business idea may have to overcome sometimes what seem insurmountable odds in order to launch their businesses. These challenges may include funding, marketing or even personal business skills. I asked Harry a friend and business colleague – (you will get to know him a little better later in the book) what type of investment he and his partners were looking to make in their new business venture. He said that he did not look at the investment value first, but he looked at the validity of the idea as a business idea to ensure that it would have longevity and profitability for all parties. To evaluate a business idea, one of his most important questions he would ask himself was “how much of my own money would I invest in this idea and why”? It is easier to invest someone else’s money, but when it comes to your own you tend to be more cautious. You need to complete the best due diligence that you can by evaluating all the business parameters prior to investing money into a new venture. This also means looking at the people you intend to do business with. Often you may find a product that is outstanding but the people behind the product are, well to put it mildly, simply inadequate and often incompetent. Harry has also experienced that, while a product may not be the best on the market this inadequacy can be made up through the people behind the product and company who give their all to their customers and that makes up for the product not being the best in the market. But the real wining combination is when the product is awesome and the people behind the company are committed, dedicated and a great pleasure to be around.

Many new entrepreneurs will see an idea as an opportunity to make money. Yet fail to see how the process needs to unfold to deliver the concept in order to make money on a continuous basis.

What does this really mean?

Harry said that from his experience he found it extremely important to understand not only the technical ability of the company but how the company operates technically in the market place – how does it make money, and how do the people support it so that it can continue to make money?

What he is saying here is no matter the type of business there is a business model which will deliver a methodology of providing goods and or services for a sales value to the customer on an ongoing basis. What you are trying to find is the most efficient way to provide what the customers want on an ongoing basis – this is how your business will make money. And there will be a system, a model for such a delivery and financial profitability.