Is My Online Business Idea Viable?
6 Essential Questions to Answer
This list outlines fundamental business concepts to guide your decision-making when setting up an online business as a solo entrepreneur. Note that there are many variations of online businesses, so some questions apply broadly across industries, while others may not be relevant to your specific industry, product, or service.
Q1. Does your Business Idea Solve a Question or Problem or Resolve a Struggle or Issue?
This question is best answered by considering: How does your product or service benefit your intended customer base? There are two elements to this: First, identify your customer group based on similar demographics. Second, explain how your product or service benefits them, highlighting the extent of the problem or issue it solves, and why the customer cannot address this need themselves.
Q2. Are People Currently Searching Online for Your Product or Service, Directly or Indirectly?
You may believe that you’ve got this covered because, when sharing your idea face-to-face, the public’s feedback is highly positive, and they show genuine appreciation – let’s say it’s exquisitely crafted arts and crafts. However! You may encounter a problem. Maybe only a small number of individuals actively search for such items or, and this is the important factor, are willing to purchase them online. But consider this: I mentioned ‘directly or indirectly’. It may be possible to channel your creativity into exploring alternative sales strategies, for example, for the given topic idea, there might be significant online search interest in decorating ideas. You could form a business alliance with such companies or create content that appears alongside relevant searches, increasing visibility for your business.
Q3. What is the level of Online Competition for Your Online Business Topic?
Following closely from the previous question, you may have conducted quick research and feel satisfied with the results, noting a high volume of searchers. However, depending on these numbers, this scenario can also yield poor outcomes. As a new business entering the market, especially on a budget, you need to be more creative and not expect overnight success. High competition often means higher upfront funding requirements for the business. But don’t worry, there are solutions. You may find many different approaches without changing your chosen business path.
This is better understood with an understanding of Keyword Research, you can learn more about this in my post here. Rest assured, when search volumes are high, the opportunities for success are also likely to be high. This means you can achieve success without needing to allocate funds for a marketing budget.
To discover niches with unmet needs in your field of interest or to determine if you can compete by creating your own Unique Selling Proposition (USP), read my post about the Importance of Keyword Research or download my free PDF guide: Keyword Research: The Beginners’ Step-by-Step Guide.
Q4. Is Your Business Idea in a Steady or Growing Market? Is There Scope for Innovation Now or in the Near Future?
Many products, and in some cases services, have a life cycle: Development, Introduction, Growth, Saturation, Maturity and then Decline. Surprisingly few survive the Introduction stage, the majority are in the Growth stage. Is your planned product or service choice within the first three of these stages? Or course there are risks that come with placing all your efforts on a product or service that is in the Developing stage, but this is where the enormous success stories happen… if the produce survives! If you find a business model that is easily affordable and doesn’t prevent you pursing other opportunities, then a business at Development stage might be a good pun! Remember, these can go on to then be rejected by the public at Introduction Stage.
It’s also important to understand that these stages are not always linear. Imagine if you could turn the clocks back a decade. You started creating content on healthy living and one of your affiliated products was the Air Fryer. That was patented back in 2010. It had a modest surge in sales about 6 years later but then just exploded in popularity 3 years after this, during the pandemic. Only when the general public became more aware of a need to improve their diet, after being locked down for a while, did sales explode. Imagine begin that business owner who left their low-maintenance affiliate business running in the background of his/her portfolio of online businesses.
The main lesson here is to ensure you’re not focusing on the Mature or Declining markets without a good strategy behind this decision.
Q5. Will Your Planned Online Business Generate Sufficient Profits After Initial and Running Costs?
Are you in a competitive market with low-value items, or in a niche with average-priced products and moderate competition? Have you researched the tools and costs required to operate your business on its specified platform? It’s crucial to assess the potential for profits from the outset. If not possible before starting, evaluate the business’s viability 3-6 months post-launch. During this time, test promotions and explore ways to pivot the business (see my Online Business Model Builder) to increase revenue over time.
1stOnlineBiz101.com advocates for low-cost, low-risk businesses, allowing you to explore and learn about building online businesses without worrying about whether you have the financial resources to start or sustain the business. Read More about the aims of this website.
Q6. Are you Working on Your Online Business while juggling other commitments, particularly a full-time job?
If your planned online business relies on your physical presence, such as needing to respond promptly to potential customers, you may be setting yourself up for failure. I plan to release a post about Passive Income shortly, discussing the importance of these business types for individuals setting up a business with full-time commitments. I will also address challenges you might encounter when expanding your business.