Filter one: skill
Skill is the simplest of the five but the most often fudged. The honest question is: today, without any new training, could you deliver the work this idea requires to a standard that customers would pay good money for? Score zero if you couldn't do this at all today, three if you could do it adequately with some practice, five if it's already part of what you've been paid for at a high standard.
The fudge that costs years is scoring three when the honest answer is one. "I could learn it," "I'm a quick study," "I've done something similar." These are all true and none of them count. Adult humans can learn anything; that's not the point. The point is that learning a new craft to a paid standard takes one to three years on top of running the business. If you're scoring an idea on skill, score what you can do today, not what you might be able to do in two years.
Filter two: demand
Demand is whether enough people want the thing you're proposing to sell, at a price that works for you, in the area or platform you can reach them. Score zero if you can't find any evidence anyone wants this, three if there's clearly some demand but you're not sure about the size, five if there's obvious, repeatable demand visible in search results, marketplace listings, social media questions or simple conversations.
Most early-stage owners overscore demand because they have an idea they love and want it to be wanted. The cure is not to do the maths in your head. Use the chapter on sizing demand later in this eBook to convert a guess into a check. For now, score honestly. If the only evidence of demand is that your spouse said it sounded like a good idea, score one.
Filter three: margin
Margin is whether the realistic price for what you're selling, minus the realistic costs of producing and delivering it, leaves you with a living wage at the volume you can plausibly produce. Score zero if the maths doesn't work even at high volume (a five-pound product you can make at a rate of five an hour is not a business; it's a way to lose money). Score three if the maths works at a stretch volume but breaks at a realistic one. Score five if the maths works comfortably at a modest volume - say, ten to thirty customers a month for a service or one to two hundred sales a month for a product.
The most common margin trap is starting from price and working backwards to costs. Start from costs and add a margin you can defend with a straight face. The earlier eBook 'How to Start a Small Business' covers this in detail. For the filter, you only need a rough number - good enough to score, not good enough to publish.
Filter four: channel
Channel is whether you can reach the customer in a way you can afford and sustain. Score zero if reaching this customer requires expensive paid advertising you can't afford or a sales team you don't have. Score three if there's a viable channel but it's slow or hard. Score five if there's an obvious low-cost channel - local search, a community you're already part of, an existing partner who already serves the customer, a marketplace where the customer is already shopping.
An idea with a score of five on demand and zero on channel is a worse business than an idea with three on demand and five on channel. Almost every owner-to-be underweights this filter at the start. They assume that if the idea is good enough, the customers will somehow find them. They won't, or at least not at a rate the business can survive on.
Filter five: fit
Fit is whether the life this business would create matches the life you actually want. Score zero if the business would require working hours you can't sustain (six o'clock weekend mornings if you have small children, late evenings if you don't), if it would put you in front of customer types you would dread or if it would force you to do work you find joyless. Score three if there are obvious life-shape compromises but they're tolerable. Score five if the work, the customers and the rhythm match what you actually want.
Owners who skip the fit filter end up with businesses that work on paper and grind them down in practice. Six-figure revenue with sixty-hour weeks and no weekends is not a victory if you wanted forty-hour weeks and your Saturdays back. Run this filter honestly. It's the one that protects you from your own ambition.
- Total 22-25: a strong candidate. Take it through to the sizing chapter and the smallest-testable-version chapter.
- Total 18-21: a worth-pursuing candidate, usually with one weak filter that needs design work. The weak filter tells you which chapter to focus on.
- Total 14-17: borderline. Worth a second pass with a slightly different angle (different customer, different price, different channel) to see if the weak filter can be lifted.
- Total below 14: probably not your business. Note what you've learned and move on. Don't argue the score up to defend the idea.
Worked example: the bookkeeper's three candidates
Bookkeeping for solo dental practices: skill 5 (her brother runs one and she's been their unofficial bookkeeper for two years), demand 4 (small dental practices in her county, plenty of them, mostly served by generalist firms), margin 4 (a monthly retainer of two hundred pounds per practice with a stretch goal of twenty-five practices over eighteen months), channel 4 (a niche customer she could reach via dental supplier mailings and her brother's network), fit 5 (work she enjoys, customers she respects). Total: 22. Strong candidate.
Tax-explainer membership for freelancers: skill 4 (she could write the content but membership marketing is new to her), demand 3 (lots of confused freelancers but most won't pay for general tax explanations), margin 3 (low monthly fee means she'd need hundreds of members), channel 2 (no obvious cheap way to reach freelancers at scale), fit 4 (work she'd enjoy, but the marketing volume worries her). Total: 16. Borderline; the channel weakness is fatal unless she can find a partner with an existing freelance audience.
Setup-only service for accounting software switchers: skill 5, demand 4 (a clear, urgent need, but a one-off purchase), margin 3 (one-off five hundred pound projects don't compound), channel 4 (cloud accounting providers run partner programmes), fit 3 (she'd enjoy the work but worries about the constant pipeline pressure of one-off projects). Total: 19. Worth pursuing as a side income alongside the dental retainer business, not as the main idea.
What to do this week
Score every candidate idea from chapter one against the five filters. Be honest, especially on skill and channel. Mark the three highest scorers. Those are the ideas worth taking into the next chapter, on sizing demand. The rest go in a notebook in case the situation changes later.
Prove demand before spending heavily. The principle that runs through this eBook. The next chapter, on sizing demand in a week, takes your top three candidates and turns the demand filter from a guess into a check. The companion eBook 'Market Research for Small Businesses' goes deeper on the same techniques once you've narrowed to one.
