Bookmark and Share

Assessing Opportunities

By STEVE STRAUSS, AOL SMALL BUSINESS
Posted: 2009-10-28 15:27:23
Filed Under: Business Ideas, Small Business Experts, Small Business, Starting a Business
Steve Strauss
Steve Strauss
Q: My son got a degree in technology management a few years ago. He has an idea for a tech business, but how do we know if it will fly? He is afraid to quit his job, especially in this economy.

Joe

A: Your question is one shared by many entrepreneurs -- actual and would-be alike: How do you know if you have a good idea?

One thing we entrepreneurs usually share is a deep passion for what it is we do. That passion is often combined with confidence (but may verge on hubris), creativity (that can sometimes be misplaced), and a willingness to act (damn the torpedoes, full steam ahead!)

More From AOL Small Business

    Let me suggest that the key to maximizing the positive and minimizing the negative is something as simple as doing your homework.

    I am reminded of the story of New Coke. You remember New Coke, don't you? In 1985, Coca-Cola made one of the biggest mistakes in the history of bad business mistakes when it got rid of Coke and introduced New Coke. Might as well outlaw mom and ban apple pie while you are at it. To no one's surprise, the new product was a complete flop. It was off the shelves in a few short months.

    How did the marketing wizards at Coca-Cola blow it so bad?

    To make a long story short, they didn't do their homework. A lack of focus groups and marketing analysis meant that, although they thought they had a great idea, no one else did. Had the folks at Coca-Cola done some basic research they would have discovered that, even though New Coke tested better in the labs, people were not willing to drink it if that meant giving up old Coke. As I said, our confidence can sometimes verge on hubris.

    And the funny thing is, it is easy to avoid that unenviable fate. Maybe you have an idea for your business, or for a business you want to start. Maybe you think it is a can't-miss, super duper, terrific idea. Maybe you are even scared that if you share it, someone will steal it.

    Too bad. You simply must get people's opinion about your plan while it is still in the formative stages -- the earlier the better. That's what I mean by doing your homework. Hopefully, people will love your idea as much as you do and would be willing to spend money on what it is you plan to sell. If so, congratulations.

    But maybe bigger congratulations are in order if they tell you that your idea stinks. Do you see how valuable that would be? That sort of information would
    - Allow you to avoid spending a lot of money and time on a bad idea, or
    - Allow you to refine your idea

    Either way, honest feedback beats chasing a dog that won't bark.

    Now of course it is true that there are times where you have a vision that others do not see; I bet few people thought selling books online was a great idea when Jeff Bezos first described Amazon.com back in the early 90s. But it is equally true that most of us are not going to be creating The Next Big Thing.

    So if you want to avoid being the small business version of New Coke, or simply want to be sure that your business idea is a winner, follow these steps:

    1. If necessary, draft a non-disclosure agreement. This simple legal document (also known as an NDA) says that your ideas are your ideas and the person with whom you are sharing them can't use them without your written consent.
    2. Get feedback from people whose opinions you trust -- your spouse, best friend, brother, whomever. If it's a business associate and you feel more comfortable having then sign an NDA first, great.
    3. Consider using a focus group, or getting feedback from online forums, Facebook groups, or Twitter discussions.
    4. Evaluate the feedback and incorporate it into your plan of action.

    By getting feedback early in the process you will know whether or not you have the real thing.

    ------------
    Steven D. Strauss is one of the country's leading small business experts. The senior USATODAY.com small business columnist, his latest book is the Small Business Bible. A lawyer, author, and public speaker, Steve speaks around the world about small business and entrepreneurship, including a recent visit to the United Nations. He has been on CNN, MSNBC, ABC, and The O'Reilly Factor among many others, and his business column, Ask an Expert, appears weekly at USATODAY.com. If you would like Steve to speak to your group, help your business grow, or if you would like to sign up for his free newsletter, "Small Business Success Secrets!" please visit his website -- www.MrAllBiz.com.

    Want to be part of this column? Ask Steve a question at AOL@MrAllBiz.com. You can follow him on Twitter @SteveStrauss.

    2009-10-27 22:09:54
    Bookmark:

    Recent Comments

    Post Your Own  
    1 - 10 of 17
    17 comments

    mh25story 07:11:16 PM Nov 22 2009

    Report This!

    If you looking to get into fashion check out Startingaclothingline.com or Google: Digital Fashion Pro

    telentia 12:27:26 AM Nov 19 2009

    Report This!

    It's interesting - not one mention of a common SWOT analysis here. A common marketing tool, a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is often used to determine the very question that the reader asked. Is a particular product or idea going to fly - conduct a SWOT analysis to gain a better perspective of how to make the product or idea work. If you want to learn the "tricks-of-the-trade", the actual nuts-and-bolts aspects of becoming an entrepreneur, send an e-mail to Telentia@aol.com and include the words "Newsletter Request" in the subject header. You can follow our start-up company in "real-time" along the path of entrepreneurship, learning all of our steps and business processes along the way. Our e-newsletter is sent out quarterly and is free of charge.Michael William MillerCEO - Telentia TechnologiesA Transformational Innovation Company

    hobbygirl08 11:16:00 AM Nov 18 2009

    Report This!

    Find home business training here. Rated #1 work at home opportunity by the national consumer protection group. New 6 hour certification program that guarantees you will be working from home with a major corporation within 3 days of course completion. Learn from the comfort of your home, at your own pace. Job placement service for a full year after course completion. http://alturl.com/i2ig

    texasboy42084 05:19:03 PM Nov 12 2009

    Report This!

    Are you into or looking for that perfect piece of jewelry for your loved one or your sweet-heart? Well, LQQK NO FURTHER. Come check out our best hand-crafted PROUDLY MADE IN AMERICA Real 14Kt Yellow Gold and .925 SOLID STERLING SILVER JEWELRY, at http://www.GOLDandSILVERdesigns.com --- and when you make your purchase you get a 20% Discount OFF.

    joehayesii 09:14:49 PM Nov 08 2009

    Report This!

    I had a great idea, talked to some people who would be backers....they told meit would not work. disappointed, I left all drawings and ideas there. Ever heardof 'The Cracker Barrel" ? TRUE!! I had no recourse....so be careful who youconfide in, or approach with an idea.

    gmsmarcia 03:49:46 PM Nov 06 2009

    Report This!

    What are the start up costs? That's always something to consider. Write the business plan. Is it possible to begin it at home? Overhead is sometimes just too much.

    mangorock333 08:17:33 AM Nov 06 2009

    Report This!

    www.mangorock.com

    mangorock333 08:17:09 AM Nov 06 2009

    Report This!

    www.mangorock.comThe greatest way to market Trucks! on a Mangorock

    franksdreamland 08:16:42 PM Oct 31 2009

    Report This!

    http://homebasedflorist.blogspot.com -

    circuitconnect 07:45:27 PM Oct 29 2009

    Report This!

    "... am reminded of the story of New Coke. You remember New Coke, don't you? In 1985, Coca-Cola made one of the biggest mistakes in the history of bad business mistakes when it got rid of Coke and introduced New Coke.""New Coke" was brilliant: Pepsi was beating Coke bad in taste tests (remember those?). New Coke was introduced as a Pepsi clone. It immediately killed the Pepsi Challenge because they tasted the same. Then, when original formula Coke-heads revolted, Coke introduced "Coke Classic". Thus Coke retained their original market and tarpedoed the effective Pepsi campain. In-fact, the curiousity over "New Coke" arguably won-over a percentage of Pepsi drinkers. Coke had something for everybody, and Pepsi needed a new Plan.

    1 - 10 of 17
    17 comments

    Add your own Comments

    Clear
    Add

    The Startup

    The Startup

    The Startup, the web's premiere online reality show for small business owners, is back for its third season! Watch as we follow four entrepreneurs to see how they're making their businesses come to life.

    1. The Startup

      Small Business Checklists

      It can be difficult to keep up with all the details involved in running a small business. Don't lose track of the details -- use a checklist to keep yourself organized.

      1. Checklist: Starting a Business
      2. Checklist: Closing a Business
      3. Index of Small Business Checklists

        Small Business Success Stories

        1. More Than Moonlighting
        2. Reality TV Leads to Small Biz Success
        3. From Couple to Business Partners
        4. Build-A-Bear's Founder Shares Her Story

          Helpful Resources

            AOL Coaches

            Jake Steinfeld

            Business Coaches
            Starting your own business can be a daunting task. With AOL's Small Business Coaches, you can get the best advice to guide you through the process.