The statistics show that 20% of startups close their doors in the first year. Another 50% of startups close within five years, with 35% of those failing to do so because of a lack of market demand. Businesses fail over a lack of cash flow, competition, legal issues, etc. Take a look at how to create a profitable business idea.
Make Sure You Have Demand for Your Products and Services
You have probably heard people say to do what you love and love what you do, but this can be unrealistic. Even if you love what you want to do, there has to be a demand in the market. You need to understand the market and research your competition. Some ideas are overdone, and it is hard to compete. Other ideas may be good ones, but if nobody wants the products, they won’t succeed. Make sure that you know your target customers and determine their problems and how you can solve them. Know your competition, and figure out how you will be different. Finally, make sure that you have the resources to get started and succeed.
2. Analyze Your Competitors
Before you open your doors, you need to research the market and analyze your competitors. If you plan to raise money through investors, you will need to explain your competitive advantage to them. How will your business solve problems for people? You can get this information through surveys directly to your customers. Hand them out, ask on social media, and more. Study your results, and then look at the strengths and weaknesses of your idea. Know what is unique about your business.
3. Test Your Idea
Once you have researched your idea and understand what you plan to accomplish, you should ensure that your products are viable through Minimum Viable Product (MVP). The MVP is made for less money to gather reviews from users. You can also use A/B testing to find the best choice for your website design. Once you collect data, determine which design customers spent their time on and which one gave you quality leads.