This is part three in a series on building a successful business – if you missed the start you can catch up here.
Step number two is having something that people want or need and are willing to pay for.
You've got this idea for a business – you're going to paint frogs gold. You've discovered a number of communities who love having live gold-painted frogs as wandering ornaments around their homes.
But there's a problem.
They love to do the painting themselves. In fact, a shop-bought gold-painted frog is regarded as vulgar.
So there's demand, but they're not going to pay for it. It's not the best idea for a business.
Want or need isn’t enough. You need to know what they’re willing to pay. And then balance against how much it costs you to both paint the frog and win the customer. Never forget the cost of acquisition – advertising, promotion and marketing. If you add those costs up and it’s still less than they’re willing to pay, you’ve taken a big step towards having a business.
Take action: Are people willing to pay for what you have? What times of their lives are they willing to shell out for it? How much is it worth to them? What is your cost of sale and how does it compare?
PS: If know someone you feel might want a bit of help with this stuff, send them here