If you’re thinking of starting a new business, you might assume that the path to entrepreneurial success means that you need to come up with a glamorous idea that stands out from the others. However, the reality is that people need products and services for everyday life more than they need something that seems more exciting than they might only use one time. You also need to consider the risk factor from a lender’s perspective if you plan to apply for outside financing.
Lower Risk Business Ideas Mean Greater Likelihood of Funding
If you’re like most new business owners, you won’t ever have the opportunity to enjoy entrepreneurial success unless you apply and receive approval for funding. Lenders weigh their risks very carefully, which means a business idea that serves an established need will usually take priority over something unproven. The history of the industry you want to break into also makes a big difference when it comes to obtaining funding. Website design, for example, has a proven track record of profitability while designing clothes for specific dog breeds might not go over as well.
Less Exciting Business Ideas Can Provide a Sharper Management Focus
In a recent study of 100 failed start-up organizations, more than 40 percent did not survive because the owner tried to introduce a product or service that people showed no real interesting in purchasing. Therefore, working with an established idea such as a dry-cleaning service might give you a better chance to reach entrepreneurial success. It also underscores the importance of conducting extensive market research before launching a new company, product line, or service to the public.
Better Opportunity to Achieve Financial Security
When you start a business that fulfills a proven need, you stand a much greater chance of producing a secure income than you do with a newer or fad type of business model. While any business runs the risk of failure, doing your due diligence to ensure a market exists for what you want to sell is your first step towards achieving entrepreneurial success.
Need professional feedback on your business ideas? Schedule an appointment with Steadfast Funding Partners today.