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I overheard a joke the other day. And while it was, admittedly, a little silly, it did hold a nugget of truth.
In the joke, an optimist and a pessimist are arguing over a glass of beer at a bar. “It’s half empty,” says the pessimist.
The optimist disagrees, claiming it’s half full.
The bartender, annoyed, comes over and promptly drinks the rest of the beer. “Now you’re both wrong,” he says.
The bartender is an opportunist — and a good one at that.
As an entrepreneur, you are, by nature, an opportunist. You see problems (and their solutions) where no one else does, and like the bartender, you’re inclined to capitalize on those situations and react.
You realize that a smartly timed move can create a niche for yourself and reach untapped markets with products and services your customers and competitors didn’t even know were needed.
That’s not to say you’re launching a risk-free startup. After all, there’s really no such thing.
But by pinpointing where people need a particular product or service and arming yourself with a powerful value proposition, you can carve your own place and make the market work for you. The hard part, of course, is knowing when and where your opportunity will strike.
Here are four tips to help you find your perfect opportunity and determine whether your ideas are viable:
Ask for Advice
When you come up with a stroke of genius or think you’ve found the perfect product idea, ask around. By questioning the potential market clientele, you’re gathering valuable feedback on whether your product idea is worth your while or even feasible.
While it’s easy to ask your friends and family, try to resist. Unless your buddies will actually be using the product or service you’ll be offering, don’t even bring them to mind. Head straight toward your potential client base, ask around, and take notes.
You should also seek advice from someone who has already launched a successful startup—especially if you’re new to entrepreneurship. They’ll have great insight into the unique nuances of the business world and help you avoid mistakes they’ve fallen trap to.
However, critically think through every piece of advice you receive. Just because it came from a “smart” person doesn’t mean it’s always right.
Calculate Your Costs Carefully
After you’ve gathered feedback, make sure you can afford to launch the project. No idea —even a great one — is immune to failure. Clients may like what you’re doing, but that doesn’t necessarily mean they’ll pay you enough money to make a profit.
Before you set your price, make sure it’s fair to your clients, but more than that, make sure it’s fair to you. People are often inclined to set their product or service at a cheaper price, but that could set a bad precedent, and it might make your investors unhappy.
Lastly, overestimate your overhead costs. Things are always more expensive than you expect, so account for that.
Reevaluate Your Plan
When in doubt, talk to a professional investor. He spends all day looking at business plans and can help you identify the flaws in yours. After the shortcomings are addressed, you can fine-tune your plan.
On that note, don’t be afraid to redraft your business plan a few times. You’re breaking new ground, after all, and there’s very little chance you’ll get it right the first time. Fixed problems are an entrepreneur’s best friend. They represent progress, so embrace it.
Take the Risk
When Airbnb and Uber surfaced, they didn’t twiddle their thumbs and wait for managers and taxi drivers to grant them permission to run their businesses. If they did, they wouldn’t have survived.
Instead, they went ahead with their business plans. By throwing regulatory caution to the wind— which, admittedly, is a scary risk — you can find a niche market that people don’t even know they need yet.
Assess whether the risk could take down your company (i.e., whether you could survive if the worst happened), and adjust accordingly. After all, for every Uber, there have been a dozen failures — but that’s how you succeed. To help mitigate this risk, ask your lawyer to see what the best course of action would be.
Thinking back to the optimist and pessimist at the bar, it’s evident that the real victor in the situation is the opportunist. By knowing the best time to act, you can corner your market and succeed in business, and your customers will flock. All you have to do is find your niche and act.
Benjamin Geyerhahn is an experienced entrepreneur, healthcare policy expert, and member of New York Governor Andrew Cuomo’s Health Benefit Exchange Regional Advisory Committee. He is the founder and CEO of BeneStream, which uses a combination of technology and a multilingual call center to guide employers and employees through the Medicaid enrollment process.
