Secret Ingredients of a Great Business

by Entrepreneurship Expert Roger Pierce, BizLaunch.ca, February 2007

Many new and aspiring entrepreneurs want to know, "Will my idea work?" It's a difficult question that no expert can answer. Some great business ideas soar, while others crash and burn.

The secret lies in knowing what makes a particular business idea viable. It's not one magical ingredient that separates success from failure, but several.

It doesn't matter whether you've discovered an untapped market, built an invention or just want to improve on an existing business concept. Before you invest money and energy into a new venture, make sure it contains some of these ingredients of success:

• Does something better, faster or differently. The saying is so true: It's not what your business does, but how it does it. You don't have to re-invent the wheel - in fact, you're better off by simply improving on the way another business is already doing things than trying to launch a completely original concept.

  Here are some examples.

  • Doing things differently. Dell Inc. didn't invent the computer. Instead, Michael Dell decided to sell computers directly to the public rather than through retailers. By doing so, Dell claims to be able to offer its clients truly customized computers at lower prices.

  • Doing things better. Quizno's is not the first submarine sandwich restaurant on the block. They saw a well established and growing market for subs but wanted to develop a unique product twist in order to attract customers away from the competition - hence the marketing slogan, "Toasted Tastes Better."

  • Doing things faster. Legendary pizza company Pizza Pizza decided delivery speed was just as important as taste, so it positioned its brand on a 'faster' premise by promising customers their pizza order will arrive in "30 minutes or it's free."

• Low start-up costs. Many great business ideas can be started with very little money.
  • Don't fantasize about investors giving you millions of dollars to launch your ingenious new business idea?investors buy into performance and profits, not airy promises.

  • While the sky should be the limit for the success of your new business, you can launch a model that's dirt-cheap to get off the ground. That often means a service-based business that can be operated by you alone or with one person at first. Or, consider a sales model that allows you to sell to customers before you order products from the manufacturer. Remember, the most expensive types of business to launch are manufacturing and retail because they require considerable upfront investment in infrastructure and people. Inventions, too, can be quite costly to get to market because you must obtain patents, build prototypes, hire a manufacturer and secure distribution channels to get your new product out into the world - all before you make a dollar.

• Saves people time or money. Your business product or service must offer some clear benefit, otherwise people won't buy it. A great business idea makes people's lives a little easier, simpler or more affordable. Sam Walton built his Wal-Mart empire by helping middle and lower income people to improve their standard of living by making brand-name products more affordable. Jiffy Lube offers to change your car's engine oil in just a few minutes, saving amateur mechanics hours of frustration. By making online shopping so easy, Amazon.ca helps busy consumers to get the books they want delivered to their doorstep.

• Rides a growing trend. Fads come and go within six months while a trend will last for years. Don't be tempted to go for quick bucks by chasing a short-term fad?you'll need quick feet and deep pockets to make any money. Instead, give your new business longevity by making sure your idea is attached to a long-term trend.

  A trend is defined as a pattern of buying behaviour that will last for years. For example, online shopping, home healthcare and adventure travel are well established trends that show no signs of slowing down. Do your homework, read popular marketing books, talk to experts to ensure that your proposed business idea is attached to a trend that will be around for years to come.

• Market research. Your idea must be thoroughly tested to confirm your assumptions. Market research simply involves doing your homework to ask your potential customers if they will buy your proposed product or service?before you launch it. Without research, you could spend all of your money and time launching your business only to find out no one wants what you're selling.
  • Market research typically includes learning everything you can about your industry, including potential customers, your direct and indirect competition, and government regulations that may affect your business potential. It includes taking a hard look at your proposed business and its product or service to assess marketplace strengths and weaknesses.

• Combines your passion with business opportunity. A great idea combines what you love to do with delivering a product or service that people already want or need.

How do you unearth your true passion? Start by looking within to assess your interests, skills and hobbies. Pay attention to how you spend your free time. Read between the lines on your resume to identify soft skills, such as helping people to resolve conflicts, working with numbers or writing reports. You'll eventually lose interest if you go into a business just because it could make a lot of money. Make sure your venture allows you to apply your passion every day while delivering a product or service that's in demand.