10 Ways You’ll Know Your Business Idea Stinks

10 ways to know your business idea stinks

You might have a bad business idea on your hands if the following statements are true.

1. Someone with expertise tells you your business idea is bad.

The surefire way to know your business idea stinks is if an expert tells you it isn’t workable. Not everyone you talk to will be qualified to give you that kind of fearless feedback, so consider the source.

If you’re looking for a trustworthy opinion, find an expert or business consultant in your desired field and ask them, point blank, what they think of your idea. That’s the approach taken by Dan Fendel, a serial entrepreneur.

Fendel says the experts he contacts typically offer candid opinions about his business ideas. To make it worth their while, he offers to pay for their lunch meeting.

“People love to be respected as experts, and, to be frank, they love to shoot down things because they know what you don’t,” Fendel shared. “And when you encourage that … it is a good thing because it saves you going down a dead-end street, spending lots of money and effort along the way.”

2. No one’s buying what you’re selling.

Experts aren’t the only ones whose opinions you should solicit about your business idea. Friends, family members and even strangers can also provide valuable feedback that may help you fine-tune your idea or decide to scrap it altogether.

When telling people about your new business idea, ask them whether they’d be willing to pay for the goods or services you plan to offer through your business. If the only one willing to buy what you’re selling is your mother, your idea for a business probably isn’t a good one.

“Every entrepreneur is enthusiastic about their idea,” explained Mike Poller, president of Poller & Jordan Advertising in Miami. “However, success is measured in dollars, investors and customers. Once your idea has convinced people to put their money where their mouth is, then you can know if it truly is a good idea.”

3. You’re not excited by your business idea.

Outside opinions about your latest business scheme can help you decide whether or not to follow through on your idea. However, there’s only one person who can tell you with real certainty whether your idea is worth pursuing: you.

As the person responsible for seeing a business idea through to fruition, you are the best gauge of whether or not an idea is worthwhile. Ask yourself a simple question: Do you feel passionate about your idea? Holding on to your passions is crucial for entrepreneurial and even career success.

“If you’re not passionate about what you’re doing, then why should anyone else be?” said Paige Arnof-Fenn, founder and CEO of global marketing firm Mavens & Moguls. “There’s a lot of noise in every category, so if you don’t have a unique story to tell and a new approach or idea that excites you, then go no further.”

4. No one is willing to help you.

Few entrepreneurs launch businesses without asking for (and receiving) help. Whether that help comes from investors, industry experts, or friends and family members, outside support is crucial for new businesses.

However, if you can’t seem to find the support you need to get your business off the ground, that might be a sign that your idea isn’t good.

“If you ask one person for help and it’s a good idea, you’ll get the name of someone who can help you,” explained Billy Bauer, marketing director for Royce Leather, a New Jersey-based luxury leather goods company. “If you don’t have a good idea, you don’t get help.”

5. Your business idea isn’t scalable.

How big is the business you want to start? While some businesses are bigger than others, many successful businesses start out small and grow over time.

“Launch small,” advised Danny Halarewich, CEO of e-commerce app company Orbit. Halarewich believes businesses must start small to account for the inevitable tweaks that must be made as they evolve.

Brahm Kiran Singh, founder of Coach Pal, a tutoring service for engineering students in India, also emphasized the importance of scalability in assessing business ideas.

“There should be a large number of target clients, and it should be easy to scale to them,” Singh advised. “A restaurant business is not as scalable as a SaaS business.”

6. Your business idea doesn’t fill a market need.

Sure, you may have invented a new product or devised a different solution to an age-old problem, but that doesn’t mean you should start a business. While innovation is important, businesses with staying power can’t just offer something new; they must provide something people actually need.

“Innovation has to be useful,” cautioned Conrad Bayer, CEO and co-founder of Tellwise, a cloud-based sales and communication platform. “It’s an area where entrepreneurs often make mistakes. They confuse novelty and utility. Just because it’s new doesn’t make it useful.”

Marc Meyer, a serial software entrepreneur and professor of entrepreneurship at Northeastern University’s D’Amore-McKim School of Business, said a good business idea is one that offers a “must-have” solution — not just something “nice to have.”

7. Your business idea’s niche is too small.

Many successful businesses exploit a market within a particular industry. But if the niche you’ve chosen is too small, you might want to rethink it. Hipster boutiques and organic, gluten-free juice bars might be all the rage right now; however, if your business idea is tied to passing trends, it could be a total flop.

“If it is a niche product or service, it probably isn’t a good idea unless the niche market is substantial in size and test sales are tremendous,” explained Andrew Zurbuch, broker and owner at Integrated Financial.

Ruben Soto, CEO of e-commerce shapewear site Hourglass Angel, agreed with Zurbuch. He explained that catering to a specific business niche can mean considerable sales growth, but only if done right. “Make sure the market is large enough and that you and your team can serve those customers better than the alternative,” Soto advised.

8. Your business idea is not generating buzz.

Many people test their business ideas on the internet — the biggest court of public opinion. To determine if your idea is worth pursuing, consider doing the same.

“The best way to judge a business idea, in my opinion, is to figure out how to test it with as large an audience as possible, on a budget that you’re comfortable with,” said Dustin Christensen, entrepreneur and digital marketing manager at Jackson White P.C., a law firm in Arizona. “The point is not to make money out of the gate but to get a realistic idea of the demand of your idea.”

Christensen uses various strategies to test his business ideas on the web, including running a Craigslist ad and launching a simple website to see if they receive any attention. Many of the ideas he’s tested this way have been duds. But, as Christensen explained, it’s worth working through these bad ideas to find the ones that might actually gain traction.

9. Your business idea is confusing.

If no one, including you, can explain your business idea, it’s probably not worth pursuing. At least, that’s what Jeff Harmon, president of Brilliance Within Coaching & Consulting, tells his clients.

Harmon prioritizes clarity when evaluating business ideas. If a prospective business owner isn’t clear about their idea, the business likely won’t be successful.

To measure a business idea’s clarity, Harmon uses a group of questions popularized by business management guru Patrick Lencioni. Consider the following when evaluating whether your business idea stinks or is worth pursuing:

• Why do we exist? (What is the purpose of your business?)
• How do we behave? (What are the values of your business?)
• What do you do? (What is the main function of your business?)
• How will you succeed? (How are you different from the competition?)
• What’s most important right now? (What are your priorities?)
• Who does what? (What role does each person play in your business?)

“If a business can answer these six questions simply and crisply, they have the beginnings of a successful business,” Harmon said.

10. You don’t have the finances to back your business idea.

Some new business ideas require hefty startup costs. If your idea is expensive, you’ll need sufficient funds to get it up and running. You may choose a small business loan to handle your startup financing or pitch your business idea to potential investors. However, if your idea requires an unsustainable level of investment and financial resources, it likely won’t work out.

Instead, choose a scalable and affordable business idea that will provide reliable profits. Otherwise, you might soon find yourself in financial trouble, which will only dissuade you from future entrepreneurial endeavors.

Best ways to get feedback on your business ideas

Learning that your business idea is a nonstarter can be crushing. However, this is valuable information that can help you cut your losses and move on to an endeavor with more potential. Take the following steps to garner valuable feedback on your business idea:

1. Ask the experts. Identify a few thought leaders or successful people in your field. (You may already know a few.) Reach out to them with details of your business idea (sending an introductory email before you go deep might be best). Not everyone will reply to you, but those who do may offer invaluable advice.
2. Test your niche. Establish an internet presence and see how people react to it to obtain feedback on your business ideas. Sure, you’ll need a budget for building a website, taking out ads and promoting your internet presence. But that small spend now is an order of magnitude lower than going all in on a bad business idea.
3. Seek alternative funding. Crowdfunding campaigns may fail when the idea you seek funding for isn’t compelling. Similarly, angel investors and venture capitalists might decline to fund your startup if your business idea is bad. If you seek funding from these sources and consistently fail, you might have a dud on your hands.

What to do if your business idea stinks

A bad business idea is not the end of the world. Use it as an opportunity to restart and try again. Here are some steps to take if you realize your business idea won’t pan out.

1. Take a step back. When you know your idea is lacking, take a step back. Put together an objective record of everything you attempted before realizing your idea wasn’t viable. You’ll finally have the emotional distance for a fair and honest appraisal.
2. Determine what went wrong. With your objective record in hand, look at the hard facts to see what went wrong, when and why. Evaluate your idea and how you went about executing it. Look outward toward the other people involved in your business and then further outward at the economy. Perhaps you’ll realize that you launched at the wrong time or with the wrong people.
3. Rebuild from what’s left. Chances are, as you analyze your failure, you’ll see that some things did go well. Note those things and keep them at the front of your mind for your next business venture. Note any lessons you’ve learned from your failures and figure out how not to repeat your mistakes. You’ll emerge a better entrepreneur, ready to test your next — and hopefully better — business idea.

Finding the right business idea

While no one wants to admit that their great business idea, well, stinks, it’s important to acknowledge the facts. If you feel less than confident in your business idea, don’t fret; sometimes, all it takes is reworking what you already have to make it more profitable and sustainable.

Choose a business idea that both excites and will repay you — literally and figuratively. A profitable idea that isn’t backed by passion won’t make it far, just as a passion project that lacks direction and is not solution-based will ultimately fail.

Sammi Caramela contributed to this article.