Most people that know me know I love business. People are always giving me business ideas. Of course, these aren't things they want to do, these are things they want me to do. There is a common flaw in there thinking that causes them to believe an idea can make money, and it goes like this…
400 million dollars a year is spent on widgets. If our widget captures just 1% of that market, it's 4 million dollars.
My first question to anyone is why do they think they can capture 1% of the market? They don't have a plan. They don't want to sell. They think that they will just put their widget in a magazine and people will buy it – at least 1% of people will.
Now, you may think I am being hard on these people. Of course they don't have a plan or any marketing strategy you say, they are just tossing around ideas. The thing is, this whole if we can just get x% of the market part of the idea is what they keep harping on. I try to explain to them how tough it is or what it would cost or how many businesses fail, and the reply is always yes but we only need x% of the market. Folks, it is hard to get x% of the market. You have to know your stuff and you have to bust your ass.
You need to understand your market. You should have market share goals. But, if a major reason you think you will be successful is that you only need x%, you are headed down the wrong path.
**For those of you who have had me give input to your business ideas over the last year, this doesn't apply to you. Most of you have been on the right track.