I recently got a call from a man in Fort Worth, Texas who wanted to know what I thought would be a good business idea for him. He’s a good salesman, and he wants to be an entrepreneur, but his last couple of business ideas went south.

I started describing what he should do to make a good decision on a business idea, and I realized that what I was describing also applies to business owners who want to add new products or services to their existing business. I thought it would be a good idea to share my thoughts, so here goes…

Acid Test Your Business Idea

Test # 1 – Believe in what you are selling

The first test for a business idea overall is to do or sell something that you are passionate about, and that you can have fun with. Being in business for yourself demands an investment of time, money, the risks and rewards of responsibility, and 100% liability for the business.

Whatever you sell, you have to believe in it. That means really believing in the benefits that the product or service can deliver to your customers or patients. It isn’t enough to get excited about the prospect of making high profits. A high potential profit on zero sales is zero dollars in profit.

If you don’t believe there is lots of benefit for the consumer in whatever you are selling, you won’t be able to sell much and they won’t be willing to buy. Consumers are smart. They can tell if you are sincerely interested in them and what they want, or if you just see them as a wallet you want to get into.

Test # 2 – Check on whether the product or service is in demand

One of the easiest ways to check on the demand of a product or service is to do some keyword research on the internet to see how many people are searching on the topic. High search numbers on relevant keywords and keyword phrases means high interest by consumers. One of the premier search tools is Google’s Keyword Tool and there are many others on the internet to double check your idea.

As of11/16/2011 there are 264,000 local people in the U.S. who search on the term anti-aging each month.

Ask lots of people; friends, family, neighbors, business associates, and people you are standing next to in line at the movies or the grocery store. You’re not asking for their permission to start a business, you’re asking them about their interest in and willingness to purchase specific products or services. For example, “anti-aging” is a hot keyword. So if you are thinking about selling or adding on a line of anti-aging products, that’s what you ask about: have they ever purchased them, have they considered purchasing them, where do they purchase them (in a store or online).

You need to know that it is a product people will buy.

Test # 3 – Run the numbers to see if there is enough profit in it

If you are adding the product to an existing business then the profit margin is easier to calculate because you already know what your overhead is costing you. If this is a new venture then it takes a lot more figuring to see, after expenses, if there is going to be adequate profit to pay yourself a decent wage. All this would be based on the number of the product you think you can sell.

Another good thing to do is to figure out how many of the product(s) you would have to sell to do better than break even. It’s no fun to make just enough to pay your suppliers and make them wealthy and not make enough yourself to reach your financial goals.

I highly recommend that any business owner give themselves a much better than average chance to really prosper financially in their business by purchasing the e-book The Business Checklist To Increase Profits.

Test # 4 – If you can’t answer this one you are in trouble

Okay, so you make a decision and start a business or add to your existing business. The next question you should answer for yourself is, “How am I going to market this?”

There are many ways to market and promote a product or service, word-of-mouth referrals, off-line through print, radio, TV, on-line through video ads, articles, blogs, mobile phone texts, websites, podcasts, and more. The big question is do you have the money to promote like you should because if not then your potential customers will never know that can buy from you.

Yes, I teach business owners to manage their money correctly so they can reach all their financial goals. But, I know that promotion plays a HUGE part in driving enough sales traffic to make it in business. So for my clients it is mandatory to budget money every week to spend on promotion. I never let them make the fatal mistake of failing to promote adequately, because they would lose momentum and their competitors will be promoting and getting the customers if they stop promoting.

For the first half of my career I had the privilege of working with some of the advertising gurus and one-for-one they lived by the motto, “When times are good, promote! When times are bad, promote even more!” Trust me when I tell you that you better live by this motto yourself if you hope to make it. However, the other key thing you have to know how to do is figure out what your ROI is (Return on Investment) on every form of promotion and promotional message.

Wasting your hard-earned dollars on promotional stuff that doesn’t work is NOT fun and can send you into despair. So test what you are doing, keep doing what works, and whatever isn’t working – ditch it fast! Now the one exception is that internet marketing takes a while to gain traction, so give it a fair test. You’ll know in a matter of days or weeks if a postcard promotion is going to bring in lots of business. Internet marketing is slower. It often takes a few months to know if what you are doing is going to work, or if you need to add to it, change it, etc. The internet changes constantly so you have to change with it.

In Summary: So there you have it – acid test every idea. Have a passion for what you are doing and be able to have fun doing it. Believe in what you are selling. Check the demand to see if enough customers will want it before you dive in and make a big commitment. Run the numbers to see if there is enough profit in it. And answer the question on how you will be able to market it adequately to get the sales you need to have enough profit to pay yourself a LOT of money.

I wish you the best success in whatever business idea you decide to pursue. Leave me a comment and let me know about what you decided from reading this article.

Money Management Solutions – Who We Are (Audio Recording) 

Listen as Sandra Simmons, President and Founder of Money Management Solutions, Inc. discusses how the company helps business owners take control of their financial future instead of being controlled by the balance in their bank account.

Transcript:

I’m Sandra Simmons with Money Management Solutions. We provide practice owners with a cash flow management software system and coaching system that allows the business owner to easily take charge of their financial future rather than being controlled by the balance they have in their bank account.

We help business owners correctly manage the cash and assets of their business to insure its survival, and train the business owner how to control the income and outgo of cash to move from just making a living to developing real wealth.

In essence we help them develop into a cash cow company that makes more profit than it needs to survive, and train them to manage the flow of cash so they can raise the cash cow rather than sacrificing it, and reach the financial goals they set when they made the decision to open their practice.

We have worked with practices that are deeply in debt, literally on the verge of bankruptcy, and have dug them out of the soup and set them on the road to solvency.

We have also worked with practices that make so much money that they end up needlessly wasting a lot of it so they have lots of material stuff, but they still don’t have long-term financial security.

To illustrate how that is true for my clients, here’s a testimonial from a client who said

The Money Management System and Sandra’s help allowed me to fix my financial problems and change the way I do business resulting in surviving this economic turmoil. I know for a fact that I would not have been able to save my business without this change.

Our Money Management Planning system gets results – and we guarantee those results when the system is used exactly as intended without alteration.

To learn more about how to turn your company into a cash cow, spend some time looking around at our website or give us a call.

I was deeply touched by an email from a friend today, and could not help looking at the state of small businesses in America and deciding to share what was shared with me. I think the idea is important enough to be given serious consideration. The future of American jobs and American business may well depend on it during the upcoming season of giving.

As the holidays approach, the giant Asian factories are kicking into high gear to provide Americans with monstrous piles of cheaply produced merchandise that has been produced at the expense of American labor.

Let’s make this year different. This year Americans should seriously consider giving the gift of genuine concern for other Americans and the small businesses they own that provide jobs for Americans. There is no longer an excuse that, at gift giving time, nothing can be found that is produced by American hands. Yes there is!

It’s time to think outside the box, people. Who says a gift needs to fit in a shirt box, wrapped in Chinese produced wrapping paper? Almost everyone gets their hair cut. How about gift certificates from your local American hair salon or barber?

Gym membership? It’s appropriate for all ages who are thinking about some health improvement. Or gift certificates to the recipient’s chiropractor or dentist. Do they have pets? How about a gift certificate from their favorite veterinarian clinic?

Who wouldn’t appreciate getting their car detailed? Small, American owned detail shops and car washes would love to sell you a gift certificate or a book of gift certificates.

Are you one of those extravagant givers who think nothing of plunking down the $100 Benjamins on a Chinese made flat-screen? Perhaps that grateful gift receiver would like his driveway sealed, or the lawn mowed for the summer, or driveway plowed all winter, or games at the local golf course.

There are a bazillion owner-run restaurants all offering gift certificates. And, if your intended gift recipient isn’t the fancy eatery sort, what about a half dozen breakfasts at the local breakfast joint. Remember, folks this isn’t about big National chains, this is about supporting your home town American businesses with their financial lives on the line to keep their doors open.

How many people couldn’t use an oil change for their car, truck or motorcycle, done at a shop run by the American working guy?

Thinking about a heartfelt gift for mom? She would probably LOVE the services of a local cleaning lady for a day. Or for the busy working Mom with kids, maybe a day with a home organizing professional would be appreciated.

Does your gift recipient’s computer need a tune-up? I KNOW you can find some young guy who is struggling to get his computer repair business up and running.

OK, you were looking for something more personal. Local crafts people spin their own wool and knit them into scarves. Local artists make jewelry, and pottery, and hand painted scarves, and beautiful wooden boxes, and lovely paintings to grace your gift recipient’s home. You can probably even find a local American artist who makes greeting cards to present your gift certificates in.

Plan your holiday outings at local, owner operated restaurants and leave your server a nice tip. And, how about going out to see a play or ballet at your hometown theatre.

Musicians need love too, so find a venue showcasing local bands, and leave them a nice tip too, or buy their music CD.

Honestly, do you REALLY need to buy another ten thousand Chinese lights for the house? When you buy a five dollar string of light, about fifty cents stays in the community. If you have those kinds of bucks to burn, leave the mailman, trash guy or babysitter a nice BIG tip. Don’t forget your minister/pastor/priest or anyone else who gives to you in ways too many to list.

You see, Christmas is no longer about draining American pockets so thatChina can build another glittering city. Christmas is now about caring about US, encouraging American small businesses to keep plugging away to follow their dreams. And, when we care about other Americans, we care about our communities, and the benefits come back to us in ways we couldn’t imagine.

THIS is the new American Christmas tradition. Copy this and send it out in emails – post it to internet discussion groups – put up a post on Craigslist in the Rants and Raves section in your city – send it to the editor of your local paper and radio stations, and TV news departments. This is a revolution of caring about each other, and isn’t that what Christmas is about?

If you liked this article, leave a comment below and consider buying American this Chirstmas.

I often get asked by my business and practice owner clients for good ideas for marketing to attract new patients and customers.

I am a huge proponent of promoting because, done correctly, it drives up patient and customer counts, and drives up income. Here are my thoughts and ideas.

Referrals Are Pure Gold

I know you have heard this before, and it is absolutely true. But equally important to asking for referrals, and running a referral program, is finding an inexpensive, easy way to show appreciation to those who refer patients or customers to you.

I have found this SOCProgram works great and I use it all the time to send appreciation cards and even small high quality but inexpensive gifts, right from my computer. Check it out and try it out in step 2 for free. You can mail 2 cards at no cost to you, so mail one to someone else and one to yourself to experience what it is like to get a card from this fantastic service. (more…)