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There are good ideas, and then there are good businesses—and obviously a pretty wide chasm that separates the two. So what’s the difference? In my experience, the difference between a good idea and a good business is… if.

Let me explain.

The Pitch

Because I’m an entrepreneur myself, and people know it, I tend to hear a lot of impromptu business pitches. This is usually at some sort of a social function—during the cocktail hour, or at an after-dinner mixer—when someone approaches me and tells me about his or her latest idea to launch a business. Some of these ideas are, honestly, pretty good; others are frankly terrible. Regardless of the quality of the idea, however, the follow-up comment is almost always something like this: Another person in the room, engaged in the conversation, will say, “Wow! I’d totally buy that!”

Sometimes I’ll just nod and smile at this comment, but at other times I’ll say: “… if.” Here’s what I mean: The person wouldn’t buy the hypothetical product for any price, in any context, or under any circumstance. The person would “totally buy that” only if the price was fair; if the product was easy to obtain from an online or offline retailer; if the branding was consistent and appealing; and if the product was perceived to be better, faster, or cheaper than competing products.

All of that to say, a hypothetical business product may well be something people would buy, but you can’t consider it in a vacuum; you have to consider the factors of marketing, availability, and price point. That’s the if. That’s what separates a good idea from a good business—and if I had to shrink this concept down into just two words, I’d pick these: Business model.

What Makes a Business Tick

Most of us would agree, I think, that having a good business is ultimately more complex than just having a cool idea—even if that idea is for a product that may seem, on the surface, to be a sure thing. Consider this fundamental principle of business: For a business to succeed over the long term, it has to offer value to customers, and in turn deliver value to shareholders.

That value can come in many different ways, but the long and short of it is that if you’re not delivering value, you won’t have customers—at least not for very long. Likewise, if you’re offering your customers value but you’re doing so in a way that isn’t making you any money, you’re not going to be a very happy business owner.

For your business to succeed, then, you’ve got to deliver the elusive win-win scenario. This requires you to map out the intricacies of how your business will operate, with all the care of an architect designing the blueprint for a building.

What’s in a Business Model?

If your brilliant idea is the fuel for your new business, then, the actual business model is the vehicle that gets you to where you need to go; both are important, but it’s likely the business model on which you’ll need to spend most of your time, if only because it’s so all-encompassing. Your business model will include customer segment, marketing channels, sales channels, cost structures, partnerships, value propositions, and more. Each of these components could be a separate blog entry—or even an entire book—unto itself; my point here is just to show how much more complicated business ownership is than simply having an exciting idea. (By the way, those who do wish to read a full book on the topic of business model creation might check out Business Model Generation, by Alexander Osterwalder and Yves Pigneur, which I highly recommend.)

And again, I don’t mean to take the wind out of anyone’s sales when it comes to their exciting idea for a product or service. Having something that people want is important, but it’s only part of what makes a business succeed. You’ve also got to let people know that this thing exists; you’ve got to present it to them in a way that makes it attractive, and you’ve got to develop and produce it in a way that’s ultimately making you money.

There are good ideas, good businesses, and good businesses for you—and the big distinction to make, I think, is the if.