How to Tell If Your Business Idea Is Good

Discover three infallible formulas for knowing if an idea is worth pursuing or not, with Foncho Ramírez-Corzo

We’ve all gone through it: we come up with an idea that makes perfect sense in our minds, but as soon as we try to plan for it, the process falls apart, and frustration gets the better of us.

To help you decide whether your business idea is good or bad, Foncho Ramírez-Corzo (@cholutions)—an expert in digital marketing and a Google Adwords Professional with over 18 years of experience—explains three simple, yet thorough approaches. These will help you evaluate your project objectively and establish whether your idea is viable.

Approach 1: The Big Ideal

Big brands have developed their concepts with this method, and it is a popular approach adopted by the most important advertising agencies in the world. It consists of considering two significant initial concepts: the cultural tension and the brand’s best self—in other words, the market’s problem and your brand’s best solution.

The three keys to understanding the concept are:

- It is a social mission, a way to see the world, a company philosophy, an idea that motivates from within the brand.

- It’s an idealistic project that helps establish long-term and profitable relationships with clients and the market as a whole.

- It’s a communication project that defines the client’s personality online and the seed of its online identity.

Applying the concept: case studies

The key phrase for this method is: “The brand believes that the world would be a better place if…” Some examples of applying this concept are as follows:

- Apple believes that the world would be a better place if people had the necessary tools to free all their potential→ Therefore, Apple developed the technology with the best usability in the market, such as a one-button phone.

- Dove believes that the world would be a better place if women were allowed to feel good about themselves→ So, Dove becomes the brand that founds its communication on messages that empower women.

- Coca-Cola believes that the world would be a better place if people could see the glass half full, rather than half empty→So, the brand positions itself as the spark of happiness in day-to-day situations. The ad in the below video exemplifies this point:

Approach 2: The Golden Circle

Simon Sikel created this approach. The basis is simple and powerful: everybody knows that they want to sell a product but not why they want to sell it. Therefore companies must flip their creative and strategical processes and resolve key questions in the following order:

1. Why do you do what you do? Define your purpose—once defined, it will be beneficial for you to have completed the Big Ideal approach.
2. How do you do it? Show how you solve the market problem.
3. What is it that you do? Show your value proposition: the final product delivered to the client.

Watch Simon Sikel explaining the essence of his project analysis approach:

Approach 3: The Canvas Model

Nobody can develop a business plan in 5 minutes. However, once completed, explaining it in 5 minutes is a sign that you are on the right track. This approach is a tool that helps those who have made some initial progress with their business plan and want to start to evaluate the business.

The key to this project analysis consists of listing the key points of the business plan into a model template that includes nine specific building blocks. See the template below:

In numerical order, you need to fill in the blank spaces with the details from your project up to that point:

1. Value Proposition: your unique value, what makes you better than your competitors.

2. Customer Segments: the customers you create value for, your target market.

3. Channels: ways you will reach your market.

4. Customer Relationship: how you will establish a loyal community.

5. Revenue Streams: sales channels and forms of payment.

6. Key Resources: personnel, infrastructure, initial capital.

7. Key Activities: main activities that generate value.

8. Key Partners: suppliers, raw materials, and know-how.

9. Cost Structure: main expenditure and business costs.

If completing your business model canvas does not take you more than five minutes, it will be a sign that, at least initially, you have a good foundation on which to carry on building your project.

If you want to learn more about how to get a personal project off the ground, sign up to the course Launching Your First Online Business, in which Foncho Ramírez-Corzo will lead you to plan, plan again, restart, build, and push forward the business idea you have up your sleeve.

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- Ideas for How to Make Your Business Profitable During a Period of Slow Activity.
- 5 Consequences of Choosing a Bad Name.
- The Creative Process: from Briefing to Budget.