Phil Knight, the creator of Nike, once said: “History is one long processional of crazy ideas. The things I loved most – books, sports, democracy, free enterprise – started as crazy ideas.”
Let's face it. Entrepreneurs are usually known for having a ton of ideas. They're idea-making machines. And it might be tempting, as a small business owner who's looking to grow, to try all these ideas. That infamous shiny object syndrome. “This is exciting, let's try this.” “That is exciting. Let's try that.”
But what quick framework could you use to begin evaluating whether you should explore pursuing your latest “crazy idea”?
The very first thing to consider: is their market for it? Are there people with access to money who will be willing to part with their hard-earned cash for what you're offering? Because if you're targeting a group that can't afford what you're offering, that's problematic.
Of course, if it's something that you're doing because you want to add some, almost like non-profit offerings to your organization, let's say you want to embrace more B-Corp type values and you are trying to encourage groups that are struggling, and you're trying to help them elevate themselves or their skills or something like that, that's a whole other story. Then, you would evaluate that differently. But if you're looking to add profitable offerings to your existing business because you want it to grow, that's the context I’m referring to. In that context, you want to make sure that whoever you're targeting is able and willing to pay for this offering.
Before quickly dismissing your ideas, really dig into it. Because if somebody's willing to pay for it because they're looking for hobbies, that is also a potential.
As an example, I personally know this really great artist in the Denver area who recently added an offering to her small business: painting murals. On the surface, one may be tempted to think: “Who's going to pay for that?” There's a huge market for it! Personal: decorating their backyard a little bit, having it done in their child's room, the nursery, etc. And business: such as vacation rental owners who want to have their properties stand out from the competition. What better way than having these beautiful murals showcasing the area that it is being rented in?
As I said, on the surface, it may seem like there is little-to-no market for it but when you dig into it, the market is absolutely there and a lot of individuals are absolutely willing to pay for the quality of the work because it's going to help their business as well.
Think about that kind of win-win. Again, it could be hobbies as well. People are looking for hobbies and they need to learn how to do things.
Another important aspect of evaluating whether there's a market for it is asking whether it is trending upward or downward? Are people looking to buy more of these things or fewer of these things?
Let's say you're looking at selling DVDs, personally, I would say it's definitely trending downward because streaming has been on the upward for a long time. And, as we know, Netflix made that amazing transition, which was quite impressive, to go from DVD rental company to streaming company. It is a nice pivot. Of course, if you're thinking that you want to cater to a niche group, that’s okay, but you really still have to dig into whether that niche group is truly dedicated. Will they continue to purchase? As with vinyl, there's a niche audience that is absolutely into it, great. But you really need to know whether this is something that is going to stay within a smaller scale or whether it's something that can potentially scale larger.
Since we’re talking about a small business that's looking to grow and add services, make sure that you know the size of that audience, what kind of revenue it can potentially bring in, and whether that audience is growing or reducing.
Another important item to evaluate in this potentially “crazy idea” is: does it make sense for your business? Does it complement your current offerings or is it simply going to confuse your audience? Is it something that your audience is going to “get”?
Taking an example from television, there was something like “Daisy's Fine Catering and Bait and Tackle Shop”. To an audience, that could be really confusing.
Even though that's an example from a TV show, be aware that maybe the offering doesn't make sense. And the hard part here is, as an entrepreneur, you're usually very excited about your new idea. The temptation is to rationalize that. “Of course it makes sense!”.
To avoid that, get some perspective. Consult others on the team. Keep an open mind. Be prepared to hear what you don't want to hear. That it really doesn't fit in with the current offerings.
Also, if you have clients that are very close to you, that's an opportunity to test the idea. Approach them and get their opinion. Ask them: “Hey, I'm considering offering this thing. What would you think? Generally speaking, as a client, how do you feel about that type of offering?”
If their answer is: “I don't get it. Are you going to be offering this within the same company?” Then that's a clue that it's not so much of a good fit.
When it's not a good fit, don't force it because it's a cool idea.
If you really must pursue it because you're thinking this thing could really take off. Consider separating it from your main offerings. Maybe even launch a separate LLC and do it under there to avoid potentially negatively impacting your existing business. For example, by confusing your messaging where the audience won't really know what you're doing, which could be problematic in attracting new business. Or from a spending perspective. Because if it really doesn't fit in and it doesn't work out, then maybe it's going to be a drain on your organization. It's really not an investment and it's really just spending money as I've talked about in a [different article](https://www.loxentus.com/blog/favoring-year-end-investing-over-year-end-spending).
Another aspect in this initial quick evaluation process is to think about whether you really want to do it. Even though something is a great idea, it doesn't mean that it should be done by you or your business.
Take a moment to imagine yourself accomplishing this new offering. How does that make you feel? Are you excited? Do you feel it's a really great idea, so you “should” do this? Imagine yourself implementing it. Imagine how this will impact you from a physical and mental point of view. Is it going to be too much? Is it realistic that you can take on this additional amazing thing? And are you ready to put in what's necessary? Are you ready to put in the effort? The physical energy, the mental effort, or is this something that's going to pull you away from the things that you value the most? Are you going to suddenly, for example, no longer have time to volunteer and this is something that brings you a lot of joy? Are you going to no longer have weekends with your family? Also evaluate whether this is going to be temporary or long term? It is just that you need to do a big push, and it's short term and you’re fine with that and willing?
But if it's something that you don't see how you're going to get to the point where you're no longer going to be involved in it all the time, then that's something to consider because there will be trade-offs there. And if it's something that, let's say if you need to invest a lot in it, because you consider this to be a great idea and investment, is it something that you really can't afford or is it something that's going to keep you up at night?
If it takes time to ramp up and you've invested all this money, is it going to bring down your business and are you going to be in a position where your cash flow is crunched or you're no longer profitable?
Take the time to evaluate those things to see whether that's the kind of thing that's going to keep you up at night, which is not good.
And let's say you went through all these things and you feel it’s such a great money making venture to the point where you would be so upset if you saw somebody else offering this and you weren’t, will it leave you miserable? Will growing this aspect of your business make you feel trapped? Really consider whether growing it in this aspect will make you feel trapped. And if that is the case, but it really is that great money making venture, look at other options. Consider simply being an investor. Maybe that's all you do with it. You invest. Maybe collaborate with someone who actually wants to do this thing. Maybe you work with them as a consultant. Maybe you work with them as a part owner. Maybe you create a board and you are on that board to help guide the idea, but you receive dividends off the profits. So those are all options to consider.
Once you’ve satisfied yourself that, so far, this new idea seems like the next great growth move for your business, of course, make sure to perform an in-depth SWOT – strengths, weaknesses, opportunities, threats, make sure the product or service is clearly defined, audience is targeted, marketing plan is solid, financials support this, and then go and find out whether this innovation that others might consider “crazy” fails or if maybe it launches a new Nike.