It’s easy to get caught up in enthusiasm for a specific project. You see a need, you have a workable solution, and your passion is high. But it’s vital that you take a dispassionate view of the future. This chapter gives you 11 tests for evaluating your business idea realistically. The best way to use these tests is to consider them as mechanisms for refining your idea.
No business will ever look perfect on paper. What may be most important here is the process: You may decide to go ahead with a business even though it fails several of the 11 tests. But assessing your business against these criteria should give insights into areas in which you need to rethink your business system in order increase your likelihood of success.
THE “ELEVATOR” TEST
Can you tell me how your business will make money in roughly the time it takes for an elevator ride—using a maximum of two short sentences? The Elevator Test is a variation on the widely known elevator sales speech. You need an “elevator business explanation speech.” Why? You must be clear on how you will make money. This simple idea may seem self-evident, but in fact many firms start with vague notions of how they will ultimately turn a profit. For a solo entrepreneur, there is only enough time to focus on a few elements, so, the business proposition itself must be simple and straightforward.