Startup idea
A college student wrote to me: “I want to be an entrepreneur and start a company fixing smart phones. I think smart phones have become critical device for both business and personal use. Do you think it is a good idea for startup? Please advice.
Answer: Have you ever tried to fix a smart phone? It can cost as much as to buy a new one. As new phones are coming out every few months how many people like to fix an old phone? How many people like to keep an old phone? As the price of smart phone is going down is it worth it to repair an old phone?
As an entrepreneur, the best thing to validate your idea is to conduct market survey. You may want to ask your friends and people to see how many people want to repair a smart phone (Assume the repair cost is 50% to 75% of the new phone cost) to determine the market needs and estimate how big is the market? If there is a need and the market is big enough to justify your idea to start the business.
I think Smartphone-repair services may be a small business for a short time because technology is changing quickly and you will have to keep up with it. To repair smart phone, you must invest in a number of components but technology changes fast and keeping number of obsolete components may not be a good idea. You also need to consider the time you put in repair it (How long would it take to open and fix a smart phone?) and how many smart phone can you fix in a day? This will help you to determine how much money you could earn by starting this business. You also need to identify who are your competitors? How many of them? How do you advertise for your business? How do you reach your customers? How do you keep them? How do you set price?
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
