Your Business May Not Be What You Think It Is

A friend asked me for advice on a business idea - she had a great idea for an app and she was so excited to tell me about it and went into great detail about all the features. I simply asked, “Yeah, but how are you going to make money with that app?”  

Reality hit and she had to think for a minute. Her best idea was to sell advertising on the app privately (not the Google Admob).

“So you’re getting into the selling mobile advertising business, does that sound like something you want to do?”

I wasn’t trying to squash her idea, but I’ve been down that path before with my first business. I started an idea because it sounded fun and exciting, but I ended up spending most of my time doing things I had no idea I was signing up for.

 Here are a few important questions to ask yourself about your business before you start it.

Am I starting a business or a hobby?

This is a real question. Do you really want to make money at your business? If it’s something that you want to do just because you love doing it, but don’t need to rely on the revenue - more power to you!

I see so many new entrepreneurs with a genius idea that has no clear way of making money and they’re planning on their idea supporting them. There has to be a connection there if you want to run a thriving business. Now, just because you may not know how to monetize your business idea at this moment, give your idea time to simmer. I strongly recommend having this hashed out before you invest a significant amount of time and money or place your future in the success of your idea.

Here's a hint - are there other people already doing what you want to do? If the answer is yes, that's a good thing! It means that its an idea that's already been proven. If there isn't anyone doing what you want to do, it could go either way. It may be an untapped market or it may be an idea that just isn't feasible. These type of ideas just need more market research at the beginning.

Are you making this product for yourself or a target audience?

We all have those apps or great product ideas that would make our lives so much easier. But before you jump in and make a business out of it, ask other people if they would buy it. I recommend even going as far as asking for presales. There’s no better indicator of a great business idea than someone that has paid for it.

Does the way generating revenue with your idea sound appealing to you? 

Now we’ll go back to my example. The thought of constantly needing new traffic and selling advertising did not sound appealing to my friend. She was just thinking about the design and process of building the app. So maybe a better business idea for her would be building and selling apps.

How you generate your revenue is the business that you're in. An online retailer may be creating shoes, but if they're getting 90% of their orders from people clicking through on their email announcements - then they're in the email marketing business. Another great example is McDonalds, they're making hamburgers, but they're actually in the real estate business. 

So what business are you really in?!