You’ve probably come up with at least one seemingly brilliant business idea in your life but then after some sober thought, decided that it wouldn’t work. This happens a lot with what appear to be amazing business ideas. They pop into your head, you get excited, but when you think about it some more, you realize the idea isn’t going to be feasible.

Sometimes it’s not easy to tell whether an idea will work or not, so this is a little checklist to help you vet your business ideas.

1. What is the income potential of the Idea?

To have decent income potential, your business must have:

• A large target market: Even incredibly niche products and services need a large enough potential market to be sustainable. If it appeals to too few people, it won’t be sustainable. The term “large” is subjective here, but basically it means the market has to be large enough to sustain the business. That could be 1 percent of market share if the market is huge, or 10 percent of market share if the market is smaller. But, it needs to be large enough that you can get a market share and sustain your business.
• Target market growth potential: If your target market doesn’t have the potential for growth, you’ll find that you’ve run out of customers to sell to pretty quickly. You can manually grow your target market by introducing different models of your product or service (a teen model if you originally target children, for example). Your target market should also be growing at a pace that will not only support the growth of existing players in the market, but also sustain newcomers.
• Market Entry Barriers: A market that is too easy to get into can potentially get flooded by pop-up businesses that dilute the market and any potential earnings from it. Market entry barriers can be government regulations, required certification or anything else that presents a bit of a speed bump so not just anyone can start a business in that market.
• Significant Required Startup Investment: A market shouldn’t require too little investment of money, time or effort, otherwise it could easily get flooded with businesses. An example of an industry that doesn’t have high market entry and doesn’t require a significant investment is social media marketing. Anyone can claim to be a social media marketing expert and can run an entire business on a computer (or even a phone).

2. Does your desired lifestyle fit the business idea?

The second most important thing to look at when vetting a business idea is if it is actually what you want to do. When starting a business, it is imperative that it is something you care about. You will be spending endless hours working at getting this new venture up and running and you likely started this new business to get out of some kind of dead end job.

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If you give three or four years of your life to this, and end up being successful, would you be happy? If you don’t have the drive, desire and urge to live through the lousy days, the downturns and all the bumps in the road, you should not start the business.

3. Do the logistics work?

Logistics relate to the money you’ll need to start the business, but also your overall abilities, your skill set, your experience and your network. Raising capital isn’t easy, but it might be the easiest part of starting your business.

A good way to find out if the logistics will work is to ask someone you trust to be perfectly honest with you to play devil’s advocate and essentially try to talk you out of your idea. Before you do that, though, you should get busy with researching and analyzing the logistics for yourself to see whether your idea is feasible.

4. Will your business be agile enough to change with future trends?

Obviously you can’t know what trends will develop in the future, but you should try to build some flexibility into your business idea to accommodate a shift if necessary. To ensure your business has a solid future, you have to accept that it might not be the same for its entire existence and frankly probably won’t be. In fact, your business might not even be the same as the idea you first came up with.

Even the best business ideas need to be put under a microscope so you can decide whether they’re truly worth risking a lot of time, money and effort to pursue. Coming up with the idea is the relatively easy part. Putting your brilliant idea through wringer of the vetting process is the hard part (or, more accurately, the first of the hard parts).

The post 4 Simple Questions to Ask Before Getting Excited About Your New Business Idea appeared first on Cross Ocean Ventures.

A lot of people give inspiration too much credit.

Contrary to popular belief, artists don’t sit around waiting for inspiration before they create something. When trying to come up with a business idea, you shouldn’t wait for inspiration, either.

Let’s talk about how to come up with great business ideas without the inconvenience of waiting for inspiration to strike.

Dots and Lines

Coming up with good business ideas is like identifying dots and connecting them with lines.

For example, you see a niche to fill in one industry (dot) and you read about a new technology that’s being developed for a completely different industry (dot) and you realize the new technology being developed for one industry could be used to help fill the niche you’ve identified in the other industry (line). By recognizing a niche to fill and a technology being developed for another industry that could fill that niche, you’ve come up with a brilliant business idea.

More Dots

The more dots you have to connect, the more chances you’ll have to come up with viable business ideas. Getting more dots is simple. You need diversity in what you read, who you meet and what you experience.

Let’s look at how to do this:

Diversify Your Reading

Whether it’s books, websites or magazines, we tend to only read about what we like. But, when trying to come up with business ideas, reading broadly rather than narrowly helps. Don’t ignore subjects you assume you won’t be interested in because you never know where that next idea is hiding.

Finding books and magazines to read is easy. You can check best-seller lists, look at what your mentors or people you admire are reading and search for publications about subjects you’ve always been curious about, but had never bothered to look into before.

Videos and podcasts are also a great resource to learn about subjects.

Diversify Your Acquaintances

Meeting new people in a variety of industries will also add more dots and lines to your business idea factory.

Listen to people who have something to contribute to you because:

• they possess knowledge that is useful to you,
• they have experiences you can learn from, or
• they know you and support your aspirations.

Friends, family, mentors and teachers can all be located easily.

As for those outside of your immediate social circle, try:

• Trade Shows and Conferences: Even ones from industries you don’t think you’d be immediately interested in.
• Business Groups: Chambers of commerce, trade associations, local meet up groups of a particular profession or industry.
• Professional Development Organizations: Like mastermind groups or Toastmasters International.
• Service & Civic Organizations: Such as Rotary International, Kiwanis or Lions. Not only will you meet a diverse range of people, but they do some amazing work in their communities and around the world.
• Business Networking Events: You probably already frequent these, but try going to some new ones.
• Self-Improvement Events: They’re like self-help books come to life and they tend to have a great energy because everyone is there for the same goal of becoming a better person.

You’ll need to be discerning and know when to escape a conversation if you feel that it’s taking up your time without giving you anything in return. Unlike a video, you can’t just turn someone off if they’re wasting your time.

Diversify Your Experiences

Probably the best way to more deeply diversify your experiences is by living abroad, which generally isn’t plausible for people deep into their careers. If it is possible, though, even staying just a few months in a completely different culture will provide a wealth of eye-opening experience.

If, like most people, you simply can’t afford to take off and live in another country, you can still get some diversity in your home country and city by doing things that get you out of your routine like:

• attending classes or workshops for hobbies you never thought you’d be interested in
• trying different types of ethnic food
• hosting an exchange student or international guests in your home
• volunteering with organizations in different parts of the world
• watching foreign movies
• visiting museums with exhibits with an international focus
• dating someone from a different culture (if you’re available, of course)
• reading books written by international authors
• reading history or travel books about a different culture
• watching documentaries about different countries and cultures

Stepping out of your comfort zone and opening yourself up to new ways of thinking will help you create those dots and lines you need to come up with a unique and profitable business idea. Get out there and diversify yourself.

The post How to Create Successful Business Ideas Without Epiphanies appeared first on Cross Ocean Ventures.

January 18, 1943 isn’t a date you’ll learn in a textbook, but for a brief while, it was the day the American government was forced to enact one of the most draconian measures the country has ever seen: a ban on sliced bread.

The ban, put in place by the Secretary of Agriculture, was meant to help America’s efforts in World War II by conserving resources like waxed paper and steel

It caused a huge uproar.

The general public was just not willing to part with their perfectly sliced loaves, war effort be damned. Less than three months after it was enacted, the sliced bread ban was rescinded on March 8, 1943, so strong was the public outcry.

Believe it or not, pre-sliced bread had only been sold for 15 years at that point. In a decade-and-a-half, pre-sliced bread went from non-existent to something so cherished that people weren’t willing to part with it despite its ban potentially helping the country defeat the Nazis.

Let that sink in.

The guy who invented the first machine that pre-sliced bread in 1928, Otto Rohwedder, had a degree in optometry and worked in the jewelry industry. How did he come up with a machine that would revolutionize the baking industry when he wasn’t even involved with it?

Simple.

He was presented with a series of dots and he simply drew the lines to connect them. The good news is that you can do this, too.

Let’s take a look at these dots and lines that our hero used to come up with his invention:

Connecting the Dots

We’ll almost certainly never know the story of the ‘aha’ moment for Rohwedder, but I like to imagine that in the Hollywood biopic of his life that we’ll never get to see, the eureka moment would be a scene where he goes to make himself a sandwich some time in 1912 and gets frustrated with his attempts to cut two uniform pieces of bread. He begins grumbling about how he wishes bakers would start selling sliced bread and then spots a piece of the jewelry he’s made with one of his own machines on the counter. The (figurative) light bulb turns on–with inspirational music swelling in the background, of course.

That’s almost definitely not the way it actually happened, but we can still easily identify the dots that Rohwedder connected and lines he used to connect them:

• It would be good if we could have loaves of bread with uniform slices …
• A machine could cut uniform slices of bread …
• I invent machines …
• I bet I could make one …
• BOOM!
• Idea.

In the case of Rohwedder’s bread slicing machine, the dots were his knowledge and experience with machinery, an inkling that people would be willing to buy pre-sliced bread if they could and either ignorance of or disregard for the fact that bread would go stale faster if sold pre-sliced.

Sometimes dots are things that are missing. Sometimes they are things that make existing processes easier. Sometimes they are things that people don’t even know they want until they exist.

If you know you want to start a business, but you don’t have a good business idea, finding more dots is crucial. Read, observe and explore subjects outside of your own comfort zone to generate more dots for yourself, and see where connecting those dots takes you.

It may even give you the greatest idea since… sliced bread.

The post How to Create the Best New Business Idea Since Sliced Bread (Literally) appeared first on Cross Ocean Ventures.

While we always hope they’re good, the fact is that we usually have more bad ones. This is just as true for business as it is for everything else in life. Lest you think this article is just about bad startup ideas, let me assure you that it’s about those, plus partnerships, sales campaigns, sales channels, marketing programs, product ideas and any other business related ideas.

In my own entrepreneurial experience, my bad ideas far outweighed my good ones and I had some ideas that I thought were good that I failed to act on because I was wasting time on the bad ones before I realized they were bad.

But, I don’t mind any of this. This is called entrepreneurship. It’s more of a dynamic process than a job or a state of being. As everyone should, I’ve relied on my past to help educate me for the future, and that is an ongoing process, as I’ve still got a lot to learn about separating the good ideas from the bad.

Let me just say that I don’t believe having bad ideas is a bad thing. Every bad idea that I acted on (and regretted later) taught me a valuable lesson and made my future ideas better. Not all bad ideas are readily apparent (if that was the case, nobody would act on them). But, they do have some telltale signs that you can watch out for. You can’t expect your team members and employees to shoot down the bad ideas, either. After all, shooting down an idea your boss thinks is brilliant isn’t something a lot of team members and employees are going to be willing to do.

The Signs

1) You believe you are the first person to think of it. Great ideas are almost never brought to life by the first person to think of them, so there must be some indication of someone thinking and acting on a similar idea. Do your research and find out if someone else is thinking along the same lines as you and has already put the idea into practice.

2) Everybody on your team agrees that it’s a good idea. If this happens, you may need to switch out at least some of your team members because they’ve gone into yes-man or yes-woman mode, which is great if you’re a celebrity, but terrible if you’re a business person. One hundred percent consensus rarely, if ever, brings about the best result. Find a trustworthy person who does not agree with your idea and find out why before you go ahead with it. If they are able to talk you out of it, it probably wasn’t worth acting on.

3) You had a great idea last year that you did not act on only to see someone else make it successful, so you are acting on this one to make up for it.Just because your brain is wired to come up with great ideas does not mean it is wired to know if those ideas are good or not. If that is the case, go back to No. 2 and find those trusted people who you can discuss this idea with and bounce it off of to see if it has any merit. Maybe you did miss out on one last year, but acting on a bad idea won’t make up for it.

4) You have a great idea for an industry that you have no experience in and limited knowledge of. To be clear, I’m not saying this can’t happen. Being an outsider to an industry gives you a different perspective on it than people who are heavily involved in it.

There is nothing wrong with being an industry outsider and coming up with a great idea, but if this is the case, then you have to be more careful and thoroughly scrutinize the idea. If you are not living and breathing this particular industry every day, that means you also may not see why it wouldn’t work.

5) You don’t know why you came up with the idea, you just came up with it.If this idea just dropped out of the sky and landed in your brain fully formed without any forethought, you also need to be careful with it.

Great ideas usually come from a long process (the “light bulb” moment when the idea strikes you is short and instantaneous but the process to get to that point is usually long). Think of a painter coming up with a masterpiece. Maybe that person can create one in a few minutes, but it still takes a lot of work beforehand to be able to do that. Only rarely can a natural talent create a masterpiece without prior long term practice.

Lest you get discouraged, from all this, the final word on coming up with great ideas is to keep thinking. It does not matter if you came up with 20 bad ideas before you come up with that one great one. That is how you keep your creativity muscles strong. You just have to know which one is the idea worth pursuing and that, like everything else, takes skill and practice.

[Photo courtesy of Pimthida on Flickr]

The post 5 Signs Your Business Idea is Not Good appeared first on Cross Ocean Ventures.