9 Sure Signs that Your Small Business Ideas are Unprofitable
- Kevon Wilson
- February 4, 2021
An idea on its own is nothing.
Your small business ideas must have the right conditions for success. Then they become opportunities.
Avoid Wasting Time and Money on Unprofitable Small Business Ideas
Starting a business can be daunting for anyone. So, it is important that you get your small business ideas right from the very beginning. Imagine choosing an unprofitable business idea; you’d be set up for failure before you even get started.
In this post, I’ve identified 9 sure signs that your small business ideas are bad ideas. With these signs you’d know exactly what to look out for. Save yourself the hassle. Avoid wasting time and money.
Here are the 9 sure signs that your small business idea is not good.
Sign #1 - Your Small Business Ideas Will be Unprofitable if You Haven’t Fully Defined Your Market's Needs
A sound small business idea must have three critical components what we at Market Activation coin the Object-Subject-Project formula ™.
The first component – Object – deals with solving a specific need. All businesses build their foundation on satisfying their market’s needs. “See a need. Fill a need”. That’s what business is all about.
However, if you’re not fully certain what need you’re solving or if your need is not fully defined, you can fail down the road.
For example, someone who is starting an online course teaching people how to draw might believe that the need of their market is fully defined – they are solving a problem for people who do not know how to draw. This need is still too vague.
The ‘object’ is not fully defined. They are losing out on huge opportunities.
You have to dig deeper to fully identify the needs of your market. What about teaching people how to draw the human body?
And with that, you could dig even deeper and break out into different segments – learning to draw the human body, learning to draw hands, eyes, feet, ears, etc.
When you understand the needs of your customers at a deep and granular level you are well on your way to success.
You are not only capturing a wider audience but you are giving your customers exactly what they want and talking to them in their own language, so to speak.
The opposite is of course, also true.
If you do not clearly define your market’s needs the competition will eat you up.
They will be serving the market in a better way than you and you would fail down the road or at least never reach the full potential of your business.
Sign #2 - Your Small Business Ideas are Bad if You Haven’t Identified Your Market
The second component of the Object-Subject-Project Formula ™ of the Market Activation Framework ™ – Subject – deals with the most important ingredient of your business, your market. Believe it or not, many people enter into business without fully understanding who is their market.
If you don’t fully understand who your market is, how can you effectively reach them? And ultimately, how can you effectively convert them into paying customers.
Small business ideas without a clearly defined and understood market are doomed to failure from the very begin. You’d end up wasting a lot of time, energy and money focusing your advertising and marketing in the wrong direction.
The traffic you’d be getting to your website will be unqualified traffic, in other words, you might be getting high quantities of traffic but little conversion because the quality of your traffic is not good. A well-understood market that is properly defined from the very beginning will assist you in getting the right traffic. You’d be able to focus your marketing efforts in the right direction and avoid wasting time and money.
The Market Activation Framework provides you with five (5) strategies and tactics to help you define and understand your market to drive quality traffic and increase conversion.
Sign #3 - Your Small Business Ideas are Bad if You Don’t Have a Clear Product
This may sound strange, but some people start their business without fully understanding how they are going to solve their market’s needs. This brings us to the third component of the Object-Subject-Project Formula ™ – Project.
Your main project is to create a solution, your customers’ superhero, that will solve their specific problem. For you’re the project component of your business idea to be effective there are 3 things that your project (your solution) must have.
- Your product or solution must stand apart from the competitors. It must be unique and different.
- It has to cater to the specific needs of your customers. Not just solve some or part of their needs, but all. Using our same drawing example, if you’re teaching to draw the human body your solution must cover all of the challenging areas that come with drawing the human body – how to draw hands, eyes, ears, muscles, feet, face, etc. If your course is about teaching to draw the human body but you only focus on the face and ears, then you are offering an incomplete solution.
- Your product must have a strong Product-Market fit (PMF). In other words, you have to produce what the market is looking for and not what YOU want. The weaker the PMF the more likely your business will fail. So it is advised to test your Product-Market Fit from the very beginning before you launch.
This Market Activation Framework Blueprint will show you all of the areas of your product that you should test.
Sign #4 - Your Small Business Ideas Are Bad if There is No Demand
No demand is an obvious telltale sign that your business idea is not good. But how do you know if your business idea or the product you want to sell has little or no demand. You can look at the sales of your competitors. You can look at the trends in the market to see if others are doing well with similar products. But using the Market Activation Framework process will show you eight (8) demand tests, tools and strategies to test potential demand for your product or small business idea.
Sign #5 - Your Small Business Ideas Are Bad if There is Too Much Demand
Too much demand is just as bad as no demand. With too much demand you can become overwhelmed and your business could crash. Too much demand also means that before long many other competitors will enter the market and if you are not careful you could get booted out of the market.
The ideal choice is to pick a niche or small business idea where there is moderate demand.
But how do you know what level of demand is moderate? In the Market Activation Framework, we show you a benchmark that identifies what we call the ‘Goldilocks Zone’ where demand is neither too much nor too little. It’s just right. This benchmark is based on the success of hundreds of successful small businesses around the world.
We show you how to find niches and business ideas that are within the ‘Goldilocks Zone’. And if you’ve already started a business we can show you how to pivot or refine your small business idea for success.
Discover How to Find Profitable Niches and Winning Business Ideas
Get the FREE Market Activation Blueprint Now!
Sign #6 - Your Small Business Ideas Are Bad if There is No Competition
No competition is a sure sign that you small business idea is not good. You may think that no competition means that you can be the king or queen of your niche. However, since there is virtually nothing new under the sun, no competition most likely means others are staying away from that niche for a reason. Most likely others have tried and failed in that niche already.
In addition, if by chance you come up with some new revolutionary idea, chances are that it will take long to become accepted by the market or others will come in and take over from you.
Consider that Google was not the first search engine, Facebook was not the first social media platform, Dell or Apple were not the first computer makers, Samsung was not the first mobile phone producer. Where are the first movers in those industries today? Where is the search engine Archie? Where is MySpace today?
So, if you stumble upon a business idea or niche that has no competition, I suggest you look elsewhere. Use the Market Activation Framework to help you know with certainty whether you niche has no competition.
Sign #7 - Your Small Business Ideas Are Bad if There is Too Much Competition
On the other hand, too much competition is just as bad. As a small business startup, with too much competition, you won’t go very far, unless you have millions of dollars to spend on expensive advertising. And I’m thinking that you do not. A competition level of QSR 200 or above is considered too much competition in any given niche.
Download the Blueprint of the Market Activation Framework now.
Sign #8 - Your Small Business Ideas Are Bad if You Do Not Have Sufficient Capacity
Most people enter into business without first analyzing their capacity. There are a number of areas to consider where capacity is concerned.
- Financial Capacity – can you afford to spend money (even a little on your business)?
- Time Capacity – do you have the time to put into your business. Even if you have little money, you can make it up with time. No money plus no time means no business.
- Passion Capacity – Are you passionate or at least interested in the niche you’re getting into? Passion fuels you to succeed. Without it your chances of success are moderate to low.
- Content Capacity – Can you become an authority in your niche?
- Digital Capacity – can your product be consumer or purchased online? As you know, the internet makes the lives of small business entrepreneurs much easier. If you can find customers online and either sell to them or market to them then your job is much easier. But if you can neither sell or market your business online then your business life might be short-lived.
Sign #9 - Your Small Business Ideas Are Bad if Your Niche is Too Broad or Too Narrow
Your niche focus is extremely important for the success of your business. If your niche focus is too broad or too you can be setting up yourself for failure.
Have you ever used a magnifying glass to burn paper with sunlight? If the magnifying glass is too far away from the paper or too close to the paper you won’t be able to get the right intensity of sunlight to create any real heat. Niche focus is something like that.
Let’s stick with the same drawing example. If you really want to teach people how to draw but have your focus on attracting people who are interested in learning how to become artists then your marketing focus is too broad. Even if you focus on just learning to draw, you’re still a little too broad. Instead if you focus on targeting people who want to learn how to draw the human body, then you are a more focused and clearly defined niche market.
The opposite is also true, if you focus on an obscure niche like learning how to draw toenails, then you are going too narrow in your focus. You’d find that very few people are only interested in learning to draw toenails.
While these examples are extreme you may be operating in a niche that is too broad or too narrow without even knowing it. The Market Activation Framework will help you to pick niches that are just right (neither too broad nor too narrow).
Discover How to Find Profitable Niches and Winning Business Ideas
Get the FREE Market Activation Blueprint Now!
