6 Questions to Evaluate Your Business Idea

We’re frequently asked questions about our work, whether it’s “What do you do?” or “How’s work going?” or something more detailed about our projects, goals, or work-life balance. But beyond the basics, there are a few questions we answer regularly…and we recommend you use them to evaluate your business idea. Because businesses – no matter the industry, niche, or market – are continually evolving. Being proactive prevents complacency in business practices and helps you avoid the potential of missing great opportunities. 

These 6 questions to evaluate your business idea are by no means exhaustive, but they provide a starting point to get you thinking. If you’re interested in following up with a more robust list, check out this Forbes article. We like the way they grouped the questions into overarching categories vs. functional area to refine your thoughts. 

As always, Simply Hudson is here when you are ready to take a deeper dive into evaluating your business idea.

Let’s start with the basics!

1. Who is my ideal customer?

For a business to profit, you need people to buy your product or service. Many businesses focus too much on demographics – if they define the age, race, income, gender, etc. of their target group, they’ll know their customer. What you really want is a broader view that also encompasses the behaviors, needs, wants, emotions, and values that drive your target group. Understanding how your customers act, what drives their decisions, what can make life easier, and what they consider important – and aligning your business actions to that knowledge – will keep your business focused and successful. It’s important that your employees understand and align to this knowledge as well. 

Apple customers value design and functionality. Nike’s customer behaviors are driven by fitness (or the illusion of living a fit lifestyle). Look to the marketing of these big brands to see how they align beyond the basic customer demographics. 

2. How am I communicating my business idea to others?

We’re big fans of clear communication – it’s our number one tip for life and business. Your business idea is no exception – if you can’t clearly, concisely, and simply tell someone what your business is all about, then it’s time for a rework. Often referred to as an elevator pitch, being able to communicate your business idea in 30 seconds or less in terms anyone (even a 5-year-old) can understand is very important. 

Simply Hudson’s value proposition is: We help individuals, entrepreneurs, and startups simplify their lives and businesses to create meaningful, impactful and sustainable growth. You know what we do and what’s in it for the customer. But, what if we had said: “We provide viable solutions that leverage operational best practices to alleviate obstacles for human beings, executives, and business founders in daily life tasks and business management.” Say what? Keep it simple!

Ask who your audience is, what value do you provide them, why are you unique. Write it out and test your pitch on friends and family – ask for their feedback and see what questions your pitch spurs. Remember: Your own enthusiasm and excitement – tone, body language, etc. – are all part of your communication!

3. What is a reasonable workload for myself? 

Burnout is rampant for anyone trying to do everything themselves, and this is where boundary setting comes in to maintain a life outside of work. We’ve written plenty about work/life balance and setting boundaries – it’s also very high on our tips for life and business. 

Of course, there may be a balance when it comes to financing. Think about what you can outsource, what you can get help on, and the most important area of focus right now (which will shift over time). Determine the value of completing work yourself, hiring support, or placing things on the backburner. Take time away to gain perspective, define the value of your time, and be intentional about its use. 

4. What can I do to streamline processes? 

Developing an efficient yet flexible process flow for your business helps mitigate risks such as burnout, cash flow, and personnel challenges. Most, if not all, problems can be improved by having the correct process in place. This is our specialty here at Simply Hudson, so if you’re not sure how to design or evaluate your processes, we’d love to connect for a free a consultation. Or, you can check out one of our online course for an introduction: The Power of Process for Powerful Growth. Need proof that processes turn into profits? We helped one business streamline their processes from the outset, which supported 250% customer growth and an estimated savings of over $80K in overhead within the first year.

Nicole implemented my knowledge into a teachable business model so my employees are able to execute tasks as effectively as I can myself. With a high volume of clients and a specific busy time of year, having this solid process in place ensures that nothing falls through the cracks. This takes an immense amount of stress off of me because I trust that the business is a well-oiled machine, and I can focus my energy on bigger picture items instead of day-to-day minutiae.

5. What differentiates you from your competitors? 

It’s important to know what you’re up against in the market, and completing a competitive analysis will provide the insight you need. What are their target areas? How do their products or services compare? What makes you stand out against the competition? Use this information to help drive strategic decisions. Find your niche, differentiate, and target the gaps you’ve identified.

6. What service is your product providing?

Taken from the Forbes article, ask what “job” are your customers hiring your product to do? Think about the Kit-Kat jingle—”Give me a break, give me a break, break me off a piece of that Kit-kat bar.” Kit-Kat is promoting itself as a way to take time for yourself. It’s not about the candy, but the service the product provides the consumer.

Do you hire eggs for breakfast? They do their job better than bananas and donuts. Do you employ flip-flops for hiking? They’re not as good of an employee as shoes specifically made for the terrain. Knowing what your customers will “hire” your product to do can help you fill the gap. 

Watch this video about what consumers hire milkshakes to do. 

What questions are useful to you?

This list of 6 questions to evaluate your business idea are just the tip of the iceberg. And no matter what phase of business you are in, they are useful to go through. We’d love to know, though, what questions are you continually asking yourself? What has made the greatest impact to your business? Drop us a line and let us know.

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