4 Tests to Fail-Proof Your Business Idea

You've put in the time, and you're ready to launch your new business idea. It's an exciting time. But how ready are you?

I don't need to tell you how much risk is involved in venturing. Financially, it is very important that you test your idea before you commit to a big launch. The knowledge you gain from testing your idea will help determine if it is ready for the market and improve your business plan. You'll set yourself up for success by preemptively identifying problems and minimizing risk. And hopefully, your nerves will be eased.

8 Ways to Come Up With a Business Idea

The start of the year is a great time to gear up to start a business. But, of course, you first need to figure out a winning concept. "You have to come up with a lot of ideas to be successful," says Stephen Key, cofounder of the website inventright.com based in Glenbrook, Nev., and author of One Simple Idea for Startups and Entrepreneurs: Live Your Dreams and Create Your Own Profitable Company, (McGraw-Hill, 2012).

Key, who has licensed more than 20 products in the last 25 years, says he generates ideas by finding different ways to engage his mind, from walking the aisles of stores to brainstorming about holes in the marketplace.

Here are eight techniques from Key and other experts that could help get your creative juices flowing:

A 7-Year-Old's Inspiring Dream to Be an Entrepreneur

For a lot of kids with entrepreneurial aspirations, the lemonade stand is the go-to business idea. Not so for 7-year-old Ryland Goldman. This kid has bigger plans.

When his family recently moved to Los Gatos, Calif., Ryland spotted a golden business opportunity: lots of foot traffic. His family lives a block away from Ryland's elementary school. Every morning a steady flow of parents and their children stream by their house.

How to Outwit Your Competition

Decades of experience have taught me that making thoughtful improvements to existing products is a consistently profitable way to innovate. An effective way to come up with ideas is to start by surveying the market in a familiar industry and asking: What's missing?

Maybe a potential demographic has been completely overlooked by industry leaders. Maybe there's been a lack of innovation for years. You don't have to reinvent the wheel to create a winning innovation.

The question to ask is: How can the products already out on the market be made better? Here are three ways to help you out-design your competition:

5 Essential Ingredients of a Winning Business Idea

Ideas come in all shapes and sizes. But my experiences and the experiences of my many students have taught me that winning ideas -- ideas that are profitable, quick to license, and inexpensive to venture -- share specific traits. Namely, they pave a smooth path to success by clearing the most difficult barriers to bringing a product to market before an entrepreneur has invested significant amounts of time, energy and money into an idea.

If your idea doesn't have the following five ingredients, you may want to assess how much you're willing to put on the line to see it succeed.