1.3 Evaluating Your Need

Business ideas surface constantly in our rapidly changing world—just about everybody has one. Unfortunately, there are not a lot of great ideas coupled with people who can actually build a successful business. An idea and a business opportunity are not the same thing. A true business opportunity consists of the following five components:

1. NEED—an idea that meets an important need, solves a problem, or reduces pain

2. EXPERIENCE—familiarity with the industry, market, products, and services

3. RESOURCES—ability to find advisors, partners, materials, and finances

4. CUSTOMERS—people who are ready to buy the product RIGHT NOW!

5. MODEL—a business model that makes money and sustains the venture

Most successful entrepreneurs tell a similar story when describing their business launch. First, they discover a NEED that is not being addressed in the marketplace or a better way to meet a need that is being addressed—such as better quality, better price, more features, or better service. Second, while contemplating their discovery, they realize they have the EXPERIENCE to meet this need—they have the skills, contacts, training, and credibility. Third, they assemble the RESOURCES they need to start the venture—partners, a prototype, money, equipment, supplies, and so on. Next, they find a handful of CUSTOMERS who are waiting for the products as soon as the business launches—sometimes customers even commit to patronize the new business before it is launched. Finally, successful entrepreneurs develop a business MODEL that allows them to make money, scale the venture, and sustain the enterprise over time.

Compare the scenario above to the aspiring entrepreneur who decides to start a business, quits a job, conjures up an idea while sitting on the couch, and tries to push it into an unfamiliar industry. I’m sure you get the point: the first example is a “true business opportunity,” and the second is just an idea. The high failure rate for business startups is often the result of people launching ideas rather than true business opportunities.

In this unit, let’s discuss the first component of a true business opportunity—meeting an important need. In many cases, aspiring entrepreneurs fall in love with a potential product they are excited to pursue. The problem is, no one needs it, wants it, or is willing to pay for it. In contrast, true opportunities meet needs and solve real problems people have in their lives. As mentioned above, the best way to discover these needs and pain points is by being involved in a particular field or industry.

If you need the product personally, that’s great. If all of your friends, family members, acquaintances, and work associates also need it, that’s even better. The more evidence you have that people actually need your solution, the more successful your venture will be.

The questions below require you to seriously evaluate the need for various business ideas you are contemplating. Take several potential opportunities through the questions below to see which ones do the best.