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Like a lot of good things in life … my dream business began unexpectedly. My father returned from Hong Kong with a gift for my mother. He gave her a piece of gorgeous moissanite jewellery. The quality was almost equal to that of a diamond and was just a fraction of the cost. It couldn’t be sourced in Australia at the time and I knew it was a brilliant idea.
So, my sister Alana and I founded Moi Moi Fine Jewellery in 2004, and although we’ve had our fair share of struggles, we’ve also found success and and still growing. We are often asked how do you know if your small business idea is a good one?
We know as well as anyone that beginning your own business can be a scary prospect but if you have drive, passion and ingenuity then ask yourself the following questions before you take the leap.
# 1. What’s the point of difference?
Will your vision will be filling a gap in the market, or improving on what is already available. If it’s filling a gap how well will it meet the dimensions of the gap? If it’s an improvement will it fit the needs, or solve a problem or discrepancy of the niche market better that what’s already out there?
# 2. Have you tried it yourself?
Knowing how the product or service performs (especially under pressure) will help with refining your idea, and eliminate some of the guessing around our first question. Try it out on your friends and family first to help knot out any obvious issues, and then dip into your market. Ask your ‘test subjects’ what exactly they like about it and whether they’d like to see anything else. Listening and taking advice from your market and your mentors is invaluable, but trust your gut too – you know your idea best.
# 3. Will people be willing to pay for it (and what is your price point)?
How much will people will be willing to fork out for your idea on a regular basis? Ask your ‘test subjects’ if they would be willing to pay for your idea and if so, how much? Start forming a realistic price range as this can expand your vision and help meet your markets needs better.
# 4. Do you have clear and realistic goals?
What does ‘success’ look like to you? If your answer is that you want to be famous then you have some refining to do. If you want to sell your product you could probably do so easily to a few family members. Set clear and realistic goals for your idea. Map out a time plan – along with a prospective budget – and what ‘success’ will look like at key points. Remember to be flexible and adaptable with this though. Setbacks don’t mean failure and sudden, unexpected growth may mean you need to retune your goals.
# 5. Is a small business or a scalable business right for you?
Both can be extremely satisfying and fulfilling, but knowing your end game will help in deciding if the business is a good idea for you or not. If you ideally want to create a small business, who will you be working with and how will it fit into your lifestyle in terms of support and work life balance?
If you prefer a scalable business, then can the business grow and are you able to facilitate growth? Can the business multiply revenue with minimal incremental cost? If you can grow your business, then you’ll be more likely to be able to achieve your goals. The product or business model will need to be proven before taking it big time. Therefore, have infrastructure, such as a good system in place, a strong team, leverage marketing and have automated technologies in place as soon as you can, so that you can scale the business as soon as it grows.
“In a world that’s changing so quickly, the only strategy that is guaranteed to fail is not taking risks.” Mark Zuckerberg
Remember, you don’t need to have all the answers straight away. We had no idea how our product would be received by Australian consumers, even amidst immense financial costs and tightly held reigns from our suppliers. It took a huge amount of focus, adapting, learning the hard way before we started to see success. After a revaluation of our business plan and shifting our core market we finally found growth.