So, you have a small business idea. Something that you imagine will create an immediate buzz, drawing in customers, making a profit and skyrocketing you and your brand to success. But how can you be sure that others will feel the same passion for your plan?
We put together a few tips to help you decide if your small business start-up idea will actually be profitable and well-received.
How to Know if You Have a Great Small Business Idea
According to the U.S. Small Business Administration, using market research and competitive analysis can help you figure out if you will have a solid customer base and if your business is unique.
When using market research the SBA recommends considering demand, market size, economic indication, location, market saturation, and pricing. Ways to conduct your research include surveys, questionnaires, focus groups, and interviews.
“Competitive analysis helps you learn from businesses competing for your potential customers,” says the SBA’s website. “This is key to defining a competitive edge that creates sustainable revenue. Your competitive analysis should identify your competition by product line or service and market segment.”
Quick Questions to Answer About Your Small Business Idea
Market research and competitive analysis can and should require a lot of time and effort. So before you begin, make sure you can answer the following questions about your small business idea.
Is anyone else doing it? Consider whether you have seen this business before, especially in the area in which you want to open the business.
Does it solve a problem? If your business is helpful and fills a void, customers won’t be able to resist your products.
Can it be copied? A business that someone can easily replicate could mean you will face a lot of competition.
Is it easy to understand? You may want to rethink things if many people are confused when you describe your idea.
Will you be able to keep costs low and profit high? This is where market research and competitive analysis comes in. Spend plenty of time on pricing.
If you can confidently answer these questions about your small business idea, it’s time to put together a business plan and take the next step — finding a reputable Certified Development Company like 504 Capital that can help you obtain an SBA 504 small business loan.
Curious about the SBA 504 loan program? You should be. It could be a great fit to get the funds you need to get started on that great idea.
SBA 504 loans can be used in several ways. Borrowers can put the funds towards a large investment such as purchasing equipment or machinery; purchasing existing buildings; purchasing land and land improvements (street grading, utilities, parking lots); building new facilities; renovating, remodeling, or converting existing facilities; or refinancing existing debt that’s connected with an expansion of your business.
There are many benefits to the SBA 504 loan. Small business owners secure low-interest rates and achieve generous term lengths and financing for up to 80 to 90 percent of project costs. Plus, down payments are always minimal.