I work with young people to help them launch their own businesses. Business start-up success is, of course, as much to do with the capabilities of the would-be entrepreneur as the quality of their business idea, but invariably I judge the latter before I know the former.
When I first hear a business idea, I subconsciously and unfairly assess it by whether the idea personally appeals to me. My passion for social enterprise, for example, tends to make me more positive about business ambitions that are more than just ‘making money’.
Over the past 20 months I’ve been told about over 100 possible businesses. Beyond my personal interests, what can I conclude about the elements of a potentially good business idea?
Is it a novel idea? If you take the ‘five f’s’ – fashion, food, facial treatments, photography and fitness - out of the frame, there are probably less than 50 other ideas. Of these, few have been particularly different, but two stand out.
The first is a shoe-selling service for people with different sized feet and amputees with only one leg. A young entrepreneur with mild cerebral palsy has feet that are two sizes different meaning she needs to buy two pairs of shoes to get ones that fit properly. She knows how costly this is and wants to solve the problem for herself and others by selling odd size pairs and single shoes.
The second business involves selling pearls in oysters that are then set in jewelry pieces of the customer’s choice. Each oyster (scanned at source to ensure it actually contains a pearl) is opened live on social media, with the owner looking on, creating an excitement which builds as the jewellery piece is created in the following weeks (for supply in the oyster shell?)
What are the start-up costs? Cost is as much about the time as the money it will need upfront. Even techy start-ups – with the right in-house expertise - can launch a MVP (Minimum Viable Product) to test the market without a major financial investment. I’ve written elsewhere about the value of not investing too much time and money in a new venture, making it relatively easier to ‘recover’ if/when the enterprise doesn’t take off. Some argue that a high personal investment makes the entrepreneur work harder to make the business succeed (but it can also make them blind to the dead horse they’re flogging).
What’s the competition? Novelty adds interest and ‘instant appeal’, but the most unusual business ideas may be novel for a very good reason; that others have tried unsuccessfully to make them work. This may be down to timing or location, but the rate with which some restaurants continue to change hands on the same site after successive failures makes me think that many restaurant owners believe they alone can buck the trend.
That said, there is something to be said in favour of starting a business in a crowded marketplace – a coffee shop for example. The number of people already selling coffee confirms there’s widespread demand for the product and/or service. And, to some degree, publicity for just one coffee shop benefits all coffee outlets in the locality. When competition is fierce it’s then ‘just’ a matter of doing better than the others. Like the barbershop in my home town which opened on Sundays when the other four barbers didn’t (now three of them do).
One way to tackle the competition is to go for a niche within the particular business sector – something that, with the advent of cost-effective communication through social media, is now more possible than ever. One young photographer is specialising in photoshoots with new born babies aged 5 to 10 days. The beauty of catching 'em so young is the scope for repeat business with milestone photos.
Is the idea simple to grasp? Business start-up ideas tend to be over-complicated. This is partly a reflection on the muddled thinking of the would-be entrepreneur – buzzing with too many ideas and thinking they have to be firing on all cylinders from day one. But if the product and/or service is not clearly communicated, the business tends to suffer because it expects too much of potential customers to understand the offer - they lose interest and look elsewhere.
It’s almost as if young people think a simple idea makes them sound, er, simple. But in a room full of business ideas of varying complexity, the best idea (on a particular day I'm recalling) was described quite simply in three words - cleaning people’s houses. A great business idea - easily explained, low start-up costs, repeat business practically guaranteed for an affordable quality service, and potential customers almost literally on the doorstep. The same goes for the would-be gardener, dog-walker and ‘man with van’ who knows what s/he is doing.
Does it meet a real need? The clichéd definition of marketing ‘selling things that people don’t need at prices they can’t afford’ is, happily, less common now than when the phrase was first coined. If there’s a genuine need for a product or service – rather than one which is somewhat contrived (for examples, look in one of those problem-solving household gadget catalogues that drop through the letterbox) – so much the better. I also like business ideas that try to meet more than one need (without getting over-complicated). One young entrepreneur came up with an interesting idea to provide pamper sessions for young mums at playgroup locations – so both generations could benefit from some play at the same time.
Sad to report that business hasn’t taken off… yet. Business success is never guaranteed and even the best ideas in competent hands can fail for very good reasons. ‘Back to the drawing board’ is not just for would-be architects.
For information about the Prince’s Trust Enterprise Programme go to https://www.princes-trust.org.uk/help-for-young-people/support-starting-business
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