How to start a profitable business

So, the question is how do you start a business that you know will make money.

In this article, we'll look at the one critical step for starting a business that makes money.

It is so easy for wannabe business owners to get caught up in the excitement of a new idea. They get caught up in developing their 'big idea' spending large amounts of time and effort on the creative and interesting aspects of taking that idea to market.

Many go all out once they make the decision to start their new business. They brainstorm product or business brand ideas. Once they have the name or brand they want to move forward with, they register domain names, start designing logos and websites and investing time and resources in the brand name they've chosen.

The problem with so many new business initiatives is the core question we are discussing. "How do I start a business that is profitable and MAKES MONEY".

You can start a new business that makes money if you can answer the two following questions with 'Yes'.

Are there customers who have a need for your product or service?

Have you done the research to identify those customers who have a need and have those customers expressed interest in your product or service?

Have you actually engaged with these potential customers, either in-person or online?

If there are customers that have a need for your product or service, will they pay a price for your product or service that includes an acceptable profit margin?

When you identified and engaged with customers who have a need and an interest in your product or service, were they willing to PAY for your product or service?

If they are willing to pay, did you confirm they willing to pay a price that includes a sufficient profit for the business?

That's it.

If you haven't validated your idea, you are likely to fail.

It seems so logical that any and all new business initiatives should start by answering these questions. But unfortunately, too many startups do not invest in the market research efforts to answer those questions before moving forward with the business.

I believe that this lack of market research and understanding of the potential customer is a significant contributor to the high failure rate of new business start ups. 20% of new businesses do not make it past the first year and 50% do not make it 5 years.

If you want to have confidence that the new business you are starting will make money, do the market research required to validate your new business idea with actual people in your target market.

As you get input from individuals in your target market, you can also determine the perceived value of your product or service and will they pay a price that provides the level of profit the business will require to be successful.

Validation of the market is the critical first step when starting a new business.