Good Business Idea vs. Bad Business Idea

**johnbears** · 08-05-2008 08:17 PM

How are you guys filtering the good ideas from bad ideas? What are the most important criteria that you look at?

For me, the following can be of advantage:

Lined up Clientale
Direct Sales
Higher Margin
B2B
Reoccuring Sales
Low Starting Capital
Brick and Mortar

**rogercbryan** · 08-05-2008 08:39 PM

It all starts with a business plan that makes sense... if you can not write one then the idea may not be all that great... this is always the first place to start

Costs
Market Research
Marketing outline
time to profitability
blah blah... write a plan

**johnbears** · 08-06-2008 05:00 AM

You are not going to make a business plan for every idea that pops into your mind. I am talking about filtering ideas before you start to make a plan. Got me?

**crackah** · 08-06-2008 06:29 AM

Business plans mean squat for me.

Trial and error.

My idea finally came down to me finding something which i enjoyed, and something which i was already doing personally, so i applied it to a business level.

Also, Do some research. some quick surveys of potentials and see what their reaction to what you are offering is.

**rogercbryan** · 08-06-2008 10:39 AM

Originally Posted by johnbears

You are not going to make a business plan for every idea that pops into your mind. I am talking about filtering ideas before you start to make a plan. Got me?

You ARE going to write a plan for every idea you have... how else are you going to KNOW which ones have a chance? The idea of 'filtering' is terrible.. you basically are asking.. 'how can I guess which businesses will work'... thats a terrible way to approach business.

A basic business plan is 5-10 pages long and be done in a couple of days. Anyone with the discipline to be successful will do their due diligence in choosing a path to take.

If your basic plan looks good then you can develop a more in depth plan. It's not that hard and its the best way to do things.

**rogercbryan** · 08-06-2008 10:42 AM

Originally Posted by crackah

Business plans mean squat for me.

Trial and error.

My idea finally came down to me finding something which i enjoyed, and something which i was already doing personally, so i applied it to a business level.

Also, Do some research. some quick surveys of potentials and see what their reaction to what you are offering is.

Some people are successful with this approach... on average more people who run a company with $1M+ in annual sales have done some type of planning to get where they are.

The best advice that can be given to young entrepreneurs who are just getting started in the business world it to plan. They all do to little of it and then they wonder why they fail. They are all energy and no discipline. I was that way once... planning has been the key to taking my company as far as I have so far... and with the way things are going... planning is going to be the key to its continued success.

**johnbears** · 08-06-2008 11:26 AM

Originally Posted by rogercbryan

You ARE going to write a plan for every idea you have... how else are you going to KNOW which ones have a chance? The idea of 'filtering' is terrible.. you basically are asking.. 'how can I guess which businesses will work'... thats a terrible way to approach business.

A basic business plan is 5-10 pages long and be done in a couple of days. Anyone with the discipline to be successful will do their due diligence in choosing a path to take.

If your basic plan looks good then you can develop a more in depth plan. It's not that hard and its the best way to do things.

First of all, its very rare that one can garuentee a business to succeed. However, you can minimize your risks and maximize your chances by doing your homework. That being said, the only way to find out if the idea will work is to test it or going live with the business. The market will tell you. And the business PLAN will only tell you squad. It only estimates you best and worst case outcomes and what you should do when this and that happens.

Second, I don't know about you, but if you are really making a BUSINESS PLAN with 5-10 pages for every idea you come up, then I estimate that you only come up with a few dozen ideas a years.

Me on the other hand, I come up with over 100 ideas a year. Some are great ideas, but most are without a business model or need way too much capital or something else I cannot resource so I forget them right off without wasting to write a PLAN. I only write a PLAN for something I see that has potential.

Are we on the same page? If not, how many business plans have you written last year? And is that the same amount of ideas you came up that year?

**StealYourDreams** · 08-06-2008 11:45 AM

Originally Posted by johnbears

First of all, its very rare that one can garuentee a business to succeed. However, you can minimize your risks and maximize your chances by doing your homework. That being said, the only way to find out if the idea will work is to test it or going live with the business. The market will tell you. And the business PLAN will only tell you squad. It only estimates you best and worst case outcomes and what you should do when this and that happens.

Second, I don't know about you, but if you are really making a BUSINESS PLAN with 5-10 pages for every idea you come up, then I estimate that you only come up with a few dozen ideas a years.

Me on the other hand, I come up with over 100 ideas a year. Some are great ideas, but most are without a business model or need way too much capital or something else I cannot resource so I forget them right off without wasting to write a PLAN. I only write a PLAN for something I see that has potential.

Are we on the same page? If not, how many business plans have you written last year? And is that the same amount of ideas you came up that year?

First, I'm from the failing to plan is planning to fail school of thought. That being said however, if someone is coming up with that many ideas per year it is not feasible to write that many plans.

Hindsight is always 20/20, but I cant imagine your 100 ideas are very well thought out and many are spur of the moment "what ifs." I prefer to think in terms of business models, not ideas.

At the end of the day it's not how many "ideas" you've come up with. Rather it's how many turned into profitable ventures.

**rogercbryan** · 08-06-2008 01:14 PM

Originally Posted by johnbears

First of all, its very rare that one can garuentee a business to succeed. However, you can minimize your risks and maximize your chances by doing your homework. That being said, the only way to find out if the idea will work is to test it or going live with the business. The market will tell you. And the business PLAN will only tell you squad. It only estimates you best and worst case outcomes and what you should do when this and that happens.

Second, I don't know about you, but if you are really making a BUSINESS PLAN with 5-10 pages for every idea you come up, then I estimate that you only come up with a few dozen ideas a years.

Me on the other hand, I come up with over 100 ideas a year. Some are great ideas, but most are without a business model or need way too much capital or something else I cannot resource so I forget them right off without wasting to write a PLAN. I only write a PLAN for something I see that has potential.

Are we on the same page? If not, how many business plans have you written last year? And is that the same amount of ideas you came up that year?

I could easily write 100+ plans a year. From new companies to new product lines for my current company. I have files upon files of them. Some are a single piece of scrap paper at first but all get a little attention. Your question was pretty direct... 'is there a way to tell which businesses will work'... my answer was... not with out some research and planning. The answer gives you a complete understanding of what needs to be done.

If you are not willing to take the time to properly plan then you need to go get a day job now. Planning is the key element to every aspect of business. If you think you are smarter then the successful people on this site.. then go ahead... don't plan...

The comment about how planning doesn't guarantee success is assenine... nothing guarantees business success... but planning is much more likely to head you in the right direction then not planning... this is simple...

**johnbears** · 08-06-2008 04:44 PM

Originally Posted by rogercbryan

I could easily write 100+ plans a year. From new companies to new product lines for my current company. I have files upon files of them. Some are a single piece of scrap paper at first but all get a little attention. Your question was pretty direct... 'is there a way to tell which businesses will work'... my answer was... not with out some research and planning. The answer gives you a complete understanding of what needs to be done.

If you are not willing to take the time to properly plan then you need to go get a day job now. Planning is the key element to every aspect of business. If you think you are smarter then the successful people on this site.. then go ahead... don't plan...

The comment about how planning doesn't guarantee success is assenine... nothing guarantees business success... but planning is much more likely to head you in the right direction then not planning... this is simple...

Roger,

I feel that you feel being attacked by me, but that is not the case. What I am saying here is what I really think is the right thing to do and I am trying to defend my point. Maybe I am wrong but I am thinking I am right. I have yet to see you pointing me why I am wrong in what I am doing. Maybe we are not communicating right?

What I am trying to say is that when someone comes up with a business idea, they can think about it for a moment and realize that is not the best idea because things don't add up. It is not about "Is there a way to tell which business will work or not" because some businesses may work but will require 10 years of time for it to work, others might require 500k to start which is way to much for most young entrepreneurs, and other business might work for now but are in diminishing market. WHY PLAN FOR SOMETHING THAT IS LOGICALLY NOT WORTH IT. Just come up with another idea that meets the criteria that you can resource. Do I make any sense?

The point of this thread was about what criterias a business idea needs to have BEFORE you take it to the next level of doing a thorough research aboput it. But you twisted it all over and you make it about DO YOU NEED A PLAN TO BE SUCCESSFULL OR NOT?. I agree with you that you need to have a plan if you want to execute a business or when an ideas looks like a potential winner. But what about loser ideas, do want to make plans for them to?

Case in point:
I come up with a Business Idea of starting a Grocery Delivery Service for the city where I live. I came up with this idea because I realize that many people would pay at least the same amount to me that they shop at local groceries because I save them time and transportation cost. Then I put my LOGICAL QUICK CRITICAL THINKING MASK on and think about the costs and disadvanatges of this business and if it is worth to put serious thought into it or in other words make research and plan this business out. Well, after thinking 10 minutes about it, I realize that this thing is not worth it because I would pay rent for a place to store the grocery which will cost at least 1000, buy a car which will cost anther 1000(s), buy gass another 1000, buy car insurance 100s, pay car break donws 100(s) and maybe have a second car 1000(s) to be save, pay taxes, pay employee 1000(s), cost of creating a website with all the products I offer which will set me back another few 1000s, credit card charges, add 10,000(s) for marketing cost, add how much time it will take to even deliver to 1 customer and that most people would not shop for more than 100 dollar and then I think about the low margin that groceries have and then I realize f this idea. For it to be successfull I will have $100,000(s) and it will take years maybe 5 or 10 to even make 1 dime of profit. And all I do is forget about this idea and hop to another idea.

It is not worth making a plan and figuring out how to lower costs and how to be profitable because you can only do so much.

**ron komorowski** · 08-06-2008 05:17 PM

I HATED business plans...now I know I need them.

As a general rule entrepreneurs will be against business plans as they want to change with every wave...be ready...turn on a dime with whatever outside influence comes which is monthly, maybe even daily.

MBAs insist on a business plan and have this argument with entrepreneurs all the time. MBAs want structure, entrepreneurs don't want to be put in one spot, they want to be able "to dance around, defend blows and throw punches", for which you may have to move out of your stance (business plan)

Well, when I started I would have had to write a new business plan every couple weeks. Everything changed so fast. I was TOTALLY against a business plan and thought of them as mostly dreams and hopes on paper and mostly bull...no one can predict business.

Today, as things get busier...I NEED A DAMN BUSINESS PLAN....FOR ME!!!!

Why? Because when things get going, you just can't hold all the information in your head and wing it. You must figure a direction and stick to it otherwise you will just go in a frantic circle!!!

Also, I don't believe that "business plan" should pertain to all business plans. OK..that means maybe you only need an abridged version. The executive summary is very necessary for yourself and also a marketing plan to remind yourself of the best direction you have figured AND nothing gets accurately analyzed until it is written down on paper.

If you wrote a business plan a year ago...guess what...fire starter paper now in this economy...so things change. Pick the degree of a business plan that would help you. We all write "business plans" when we start. It just may not be in the official form.

If you are seeking capital you NEED a full business plan, exit strategy and all.

Ron Komorowski
Inventor of Handi-Straps
Handi Straps Lifting System Home

**Aletheides** · 08-06-2008 05:28 PM

Profit.
Passive.
Leverage.

**johnbears** · 08-06-2008 05:48 PM

Originally Posted by Aletheides

Profit.
Passive.
Leverage.

Awesome, can you expand on the Leverage part please?

**Aletheides** · 08-06-2008 07:34 PM

I forgot System too. Every good business has good systems.

Originally Posted by johnbears

Awesome, can you expand on the Leverage part please?

IMO online businesses offer the best ways to leverage. The startup costs are low, you can easily hire people (leverage other peoples time) from overseas at low cost to help you with customer service, Search Engine Optimization, pretty much anything. And getting targeted visitors for free from Google is HUGE. If you create a system where you also have affiliates or some kind of viral scheme working for you somehow, that's also strong leverage.

This post from Enke talks about leverage in general and I thought it was pretty good: 5 Things I Have Learned From Real Life Millionaires

**crackah** · 08-08-2008 04:37 AM

Okay, Trial and error is not exactly what I meant. Do research.
I meant do research and find the response, if its shit move on to the next.

Call up competitors and pose as a client. See what they do and if you can beat it.

Do surveys, say that at the end of the month you will give a ipod away for someone doing your survey. People will do it, especially if its easy! and you can even lie about the ipod lol. The point is you get peoples feedback.

Call up your target if its b2b and talk to the person in charge about what you will offer and if thats something they would need, and if they have someone at the moment doing it, ask how i can be done better. Would also give you great leads in the future.