So, how do you asses a business idea?
 In analyzing your business ideas you must be able to pass them through a test to determine if they truly are valid opportunities. All of your ideas must have a demonstrated need, ready market, and ability to provide a solid return on investment.
Is the idea feasible in the marketplace? Is there demand? Can it be done? Are you able to pull together the persons and resources to pull it off before the window of opportunity closes? These questions must be considered and answered.
Opportunity-focused entrepreneurs start with the customer and the market in mind. They analyze the market to determine industry issues, market structure, market size, growth rate, market capacity, attainable market share, cost structure, the core economics, exit strategy issues, time to breakeven, opportunity costs, and barriers to entry. Below are two models that entrepreneurs use to evaluate their business ideas and plans.
To evaluate opportunities, entrepreneurs should ask themselves the following questions:
| 1. |
What is the need you fill or problem you solve? (Value Proposition) |
| 2. |
Who are you selling to? (Target Market) |
| 3. |
How would you make money? (Revenue Model) |
| 4. |
How will you differentiate your company from what is already out there? (Unique selling proposition) |
| 5. |
What are the barriers to entry? (Licenses, Patents, Copyrights) |
| 6. |
How many competitors do you have and of what quality are they? (Competitive Analysis) |
| 7. |
How big is your market in dollars? (Market Size) |
| 8. |
How fast is the market growing or shrinking? (Market Growth) |
| 9. |
What percent of the market do you believe you could gain? (Market Share) |
| 10. |
What type of company would this be? (Lifestyle or High Potential, Sole Proprietorship or Corporation) |
| 11. |
How much would it cost to get started? (Start-up Costs) |
| 12. |
Do you plan to use debt capital or raise investment? If so, how much and what type? (Investment needs) |
| 13. |
Do you plan to sell your company or go public (list the company on the stock markets) one day? (Exit Strategy) |
| 14. |
If you take on investment, how much money do you think your investors will get back in return? (Return on Investment) |
Once you've thoroughly evaluated an idea and feel like it's viable and you can be successful, go for it! Life is too short to leave your good ideas wasting away. What’s the worst thing that can happen…you end up working a job? Hello! Even if the business doesn’t succeed, you’ll have fun doing something of your own, and next time you'll be an expert at evaluating new opportunities! Much success to you.
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