How to evaluate a new business startup idea with the help of an online coach
I want you to succeed in your startup business or new online business, just as I would expect any business coach to say the same, so please give a lot of thought and effort into this vital phase of your business journey and that is the evaluation phase.
It will prove vital as you progress to the next stage of business planning.
A good online coach will not “pussyfoot” around you — they will tell you straight how they perceive your idea as they will be using every ounce of their instinct and experience to help you.
How to evaluate a business idea?
Having an online business coach is one of the best assets you can have when it comes to evaluating your new business ideas.
They will be highly experienced in starting, running and growing their own businesses and will have that entrepreneurial spirit to help you turn those “lightbulb” ideas and moments into a profitable business.
But let me first define the word “online” as it applies to my coaching and explain how I help.
My goal is to help you solve your problems and whatever those problems are — it could be how to recruit and train a sales team, help with cash flow management, evaluate your business idea or help you avoid going bust.
Or you may just need to talk to me and have me as a “sounding board.”
And to deliver the above, I work with people on a one-to-one basis and I do this in person, through Skype/Zoom, via email…but I make sure you have access to me because that is truly the fastest way to get you the result you require.
“Online” for me, is simply about convenience and as I gradually expand the information I have amassed over the years, I will launch online courses that will cover specialist topics, but you will still get personal access to me.
Every coach has their own style and some like to deliver “packaged” courses where there are fixed amounts of time allocated each month for strategy calls, motivational calls and of course the content you have signed up for, which is great if you like to work that way.
In my thirty-five-years of business experience and being an entrepreneur, I have always wanted a solution to a problem “now” and if I can get that from a trusted source then even better and if not at that time, I will take the nearest option.
Problems occur in real-time and I match my coaching services accordingly.
So with that out of the way let’s get to the heart of the matter…
Pressure testing your business ideas
A good business coach will “pressure test” your new business ideas and that doesn’t mean they will be deliberately challenging everything you say, they will simply take an impartial view on your idea and see if they can smash it to pieces and then see what can be put back together, what needs to be discarded and ultimately to create a solid business offering.
I’m serious here and I often have people re-think totally their ideas or even abandon them altogether and stay in their day jobs. I have saved many people serious amounts of money here because, during this process, I will also be testing their passion for the business and their personality and a lot of people realize they are simply not cut out for business which is perfectly OK.
There is no real “secret” to having a successful business other than having a good, solid idea, being passionate about it and working every possible hour you can to make it a success.
I coach many people and companies across varied industries and unfortunately many of them simply have not thought through their ideas thoroughly enough and this is usually the root cause of the problem they are coming to me with when they feel they need coaching help.
The usual course of my action at this point is to right back to the beginning to see how the business was started and the idea behind it.
So it makes a whole load of sense for you to invest a good amount of time in the evaluation process and get expert help right from the start.
Getting to the heart of your startup
A good coach should be able to get right to the heart of your business startup idea in minutes, no matter how complicated your business is and that is because they should be experts in the art of business and entrepreneurship. They should know how you think, the process you have been through and the pain points you are likely to suffer.
For me, I am all about the person behind the business and now I will give you some real-life experiences on two totally different characters so let me introduce you to Mr. X!
Mr. X is a born entrepreneur…he can sniff out a “deal” a mile away and in fact, he loves deals so much he often does them with himself!
He has little time for market research or evaluation and survives on pure instinct and belief.
He gets so enthused with his beliefs that his passion is infectious — banks want to lend money to him even if he has no business plan and customers will buy from him without a hint of a product or service.
Trust me — Mr. X is real and I am only protecting his identity here out of courtesy…and I should know because I was in business with him!
Now let me introduce you to Mr.Y and this individual is the model businessman — he was the model pupil at school, the star in University and is a very well-liked and well-respected employee, but has a huge amount of ambition.
Messrs X and Y both want to start companies and take two completely different approaches and I will tell you that I am talking through experience here because I have worked with them both.
Mr.Y, will conduct deep market research and create the perfect business plan that you could put in front of any banker or venture capitalist.
But Mr. Y will not enthuse that banker or anyone for that matter, because he does not exude the same passion or enthusiasm as Mr. X, so who do you think will succeed in the world of business between these two very different people?
The answer is that I have personally seen both types succeed and fail — and there is no real bias to the type because, in reality, you need a mixture of both.
I started out as Mr.X and then became Mr.Y, but have now settled in between and that is exactly where I believe you should be, so you may have to make a few adjustments when it comes down to your personality and evaluating your startup business idea!
Business Idea creation
The amount of ideas I think about is huge and you may or may not have the same thoughts — executing those ideas is another issue, but in my defence, at least I have them in the first place.
I recommend you carry a small notebook with you and not only write down the idea you have and at the time, but give the idea an “emotional grade.”
Let me explain:
I used to simply write each idea down and with the view that I could look back at them at some point and use them! However, when I looked back, I could never understand how or why I had the idea in the first place, so essentially, it was useless!
Now, I write the idea down on one blank page as a heading, then I grade it between 1-5 and 1 being the least important. From there I write a short paragraph to talk about how the idea came about — did it “flash into my head” or did I think about something?
I also write about the emotional impact of that idea — did it make the hairs on the back of my neck stand up for example, just like a piece of music can do?
Now I have a much better reference point.
One of the most important strategies for idea creation that I must also mention is to take yourself out of your current environment and focus on something else completely.
For me, this can be golf, cooking watching a video or simply searching YouTube for example.
One of the most important parts of a business is idea creation — not just to get it off the ground, but to keep it evolving and to stay ahead of the competition. I have never been short of ideas for myself and my clients and I have given away so many in my coaching business and to my friends.
But remember, ideas are everywhere if you look at the business landscape, but the execution is key!
The business idea evaluation process
I will walk you through the process I use to evaluate a business idea and it doesn’t really vary and here is a real example of someone who wanted to set up a coaching business in a very niche sector, which I thought would be a challenge, but I want you to remember that it is all about the data which is easily available in today’s world.
The first step was to find out the size of the global coaching market (this person was in the UK) and then to get a simple sector analysis which was broken down into different areas such as life coaching, business coaching, career coaching, etc.
I cannot stress enough that you need to get hold of global economic data and say, for example, your business is in manufacturing, then you need to get the global economic view on manufacturing and that will always come from the USA, as their economy drives the rest of the world.
Take a look at this site to get an idea and there are many other free sources — use them and please don’t think your business isn’t “important” enough to do the research, or that it is too small and significant.
At the end of the day, global economic conditions determine how companies perform and how much money ends up in the balance sheets of those companies and ultimately, the pockets of consumers and that will impact your business.
We could see immediately that the industry was growing at a fast rate and the next step was to simply Google the niche they were going to operate in and see the results.
The goal was to see who had reached the top of the organic search results because they had not “bought” their way to the top of the page.
We would now look at each of those companies in relation to the information we required to establish the following, which are also the building blocks for your business plan:
- Market — what is the market they are going to operate in and who are they going to serve
- Message – what is the message they are going to deliver and what do they do for their clients
- Model — what does the business model look like
- Monetization — how will the business generate cash
- Metrics — how the business will measure its performance
You see, most of the evaluation work has already been done for you — your competitors have already established a market because they have customers that have bought from them, so you need to look carefully at what they are doing and then find a way to do it better, cheaper, etc. The building blocks have already been laid!
Put yourself out of business
Sounds a strange headline for someone who is trying to tell you how to evaluate a business idea that will hopefully make you successful doesn’t it?
Well, bear with me!
Whatever person or business I coach, I will always tell them to try to put themselves out of business — I will give you a career coaching example here.
When I talk to someone who is looking to better their job or career, I will always ask them to tell me about someone who they think is way better than them and also someone who is right behind them and trying to get their job.
Next, I will ask them to tell me why the person is better and to talk about the qualities the person who is after their job has, that they admire.
I do exactly the same with companies to make them see what is both ahead and right behind them.
I met a friend of mine recently who is in the engineering business and I asked him how things were going and he told me about how much money he was earning, the recent holiday he had and the new clients he was lining up and I was very happy for him…but I sensed he was too relaxed and knowing his personality, I asked him if he was OK.
We had previous conversations about him retiring and he said it was way too early, so I asked him again and he responded with the same — he said that this was the best time of his life, he was earning the most money ever and enjoying himself.
I then told him that this is precisely the time he should be careful and did he remember how he got into the business, to which he said he did (he was made redundant from a major company and started out on his own as a result). I then told him that right now, there was someone in a similar situation to him, who is even more hungry for success and who will also look at your business model and try to smash it and take your customers.
That was all he needed to get out of his “relaxation mode” and he is now even further ahead than before.
Now when it comes to business and I mean being in a startup situation, pick one of your future competitors and see what you would do to take market share from them and ultimately beat them.
You will be amazed at how creative you can be at this stage.
Putting it all together
Now let’s go back to the 5 “M’s.”
You should know the size of the market you are going to operate in, the key companies or individuals and of course, your competition because at the same time you will have identified your target market — just like the person I coached who followed this breakdown in relation to their coaching business startup idea:
Market — Niche — Sub-Niche
The market was coaching and the relevant data was collected regarding the global market. Next came the niche, which was a specific area and let’s use an example of “life coaching.”
Then we focussed on a sub-niche, which again, as an example could be “relationship coaching for over-40’s.”
Now it is time to pressure test your idea. this is where your business coach should be pushing you hard and testing both the idea itself and your passion for it.
So we have the target market identified with all of the data to back it up and you now have to deliver a message to that market. One of the best ways is to solve their problems and in the coaching example, we have identified a targe market of relationship coaching for the over 40’s.
The message could be as simple as “start to live the life of your dreams after 40” and I am just using words that come into my head as I am writing. but you get the idea.
Now you have to build a business model that supports the delivery of the services and/or products that support the message. And following the example, the model in question would be a website, with the business owner initially trading time for services, but with the aim of automating delivery as much as possible to improve the paying customer reach.
And of course, there would have to be a solid sales and marketing plan as well as financial management and controls.
In the coaching example the initial offering would initially be, trading time for services, but with a desire to launch an online membership site, where members could receive the key and constantly updated information, for a fixed monthly fee and with a discount applied to members who want to have one-to-one consultations. There is also a possibility with this example, of organizing regular retreats so that like-minded people could come together.
This one is simple — measure and track everything and here I will also include risk management. You need to be aware of the risks to the industry and prepare for them.
An online business coach can definitely help you on how to evaluate a business idea and you need an experienced business coach who is totally committed to your success, who has been in business, has an entrepreneurial spirit and who will not be frightened to tell you the truth.
They will also be able to get to the heart of your idea extremely quickly and use all of their experience and expertise to evaluate it.
Idea creation is key and it is essential to make sure that you capture the emotional intent of your idea as much as the idea itself.
Your coach will also take you through the building blocks of your business plan to make sure you have undertaken the correct research, designed the right model, identified how you will monetize and measure the business.
Finally, make sure that you spend the right amount of time and energy on how to evaluate a business opportunity as it will hopefully repay you huge dividends much later on!
If you would like to get personal one on one online business coaching to learn how to evaluate your business ideas, you can get in touch with me at https://www.neiljcfranklin.com/
Read more business tips by Neil Franklin