Business ideas

How to find good business ideas

busker performer

Immediately think about your customer.

Flickr/Mike Maguire



How do you know if your business idea is a good one?

In a video posted on the I Will Teach You to Be Rich Youtube channel, Ramit Sethi, CEO of I Will Teach You to Be Rich and GrowthLab, demonstrates what he calls the “Pay Certainty Technique.” (He named it that, he says, because it guarantees you’ll get paid.)

Once you have narrowed down some possibilities for your target audience, for example, Women aged 40-45 or senior executives aged 35, it’s time to ask yourself two questions:

  1. Would these people have the ability pay ? Do they really have enough money?
  2. Do they have the will pay? Would they even pay for it?

It sounds simple, but being honest with yourself about these two issues alone can eliminate up to 75% of unviable business ideas, Sethi says. He gives an example: Imagine that you are a very good stylist. You are excellent at dressing men.

You ask yourself the above two questions about three groups of potential customers:

18 year old men

  1. Do they have the ability to pay? No, they don’t have any money.
  2. Are they willing to pay? No. “They don’t care. They wear t-shirts. They go to college.”

65-year-old retired men

  1. Do they have the ability to pay? Yes, they have the money.
  2. Are they willing to pay? No. “They wear Hawaiian shirts to the golf course. They don’t care.”

Senior executives or executives aged 35 to 40

  1. Do they have the ability to pay? Yes, they have the money.
  2. Are they willing to pay? Yes. “For them, looking good is important to their corporate career.”

“Is that a broad generalization?” Seti asks. “Yes. Are there any exceptions? Yes. Do I want to spend all my time pursuing a potential idea that has very little chance of coming to fruition? No.”

Watch the full video on Youtube »