Got an idea and trying to weigh up the risk vs. investment vs. chance of success? Taking the time to analyze the strength of a new business idea can help you determine if and how you wish to proceed in bringing that idea to life.
Analyze the feasibility of the idea
While you may have a terrific idea for a business venture, feasibility will determine whether this idea can actually be executed effectively. For instance, if the idea requires millions of dollars worth of equipment, or knowledge that you do not possess, it will become difficult to make it happen. However, if the idea requires little to no equipment and is in a field in which you are already familiar, the chances for positive outcomes increase. Be realistic in assessing all the working mechanics and opportunity variables that make the difference between presenting roadblocks and providing a clear and focused path to success.
Consider the demand
Prior to investing time or money into an idea, it is important for any entrepreneur to take an analytical approach to the situation. It is often hard to look at an idea objectively, particularly when convinced it is a great one. However, a completely fair and balanced approach is a must in order to ensure that the entrepreneur does not end up wasting time or money.
For instance, while a person may love the idea of creating makeup for dogs, if no one else wants to buy this product, then it will become a waste of time and money. Instead of just assuming that there is a huge demand for makeup for dogs, it is necessary to take a step back and do some research. Talk with people who own pets. Would they buy makeup for their dogs? Is there already a makeup line for dogs that exists? If it becomes clear that there is a real desire for this kind of product and that it does not exist yet, move forward with the business. However, if the marketplace is already cluttered with similar ideas, or there is simply no interest in such a product, move on.
The Dos to Differentiate
What already exists in the business arena that you wish to operate; and how are you going to make your business stand out from the competition? Take the time to analyze your competition as a means to determine your best practices and fit in the marketplace.
Key questions that will help you build your points of differentiation:
What is the immediate market for your business?
Who will be your immediate customers? How will you reach and attract them?
What kinds of products does the competition sell? Do they have a diverse line or are they single-focused? What is their pricing structure? Their customer service practice?
How will your business impact the market in a new way? How will it stand out from the competition?
What kind of team do you need to build to ensure quality operations at all levels of the business?
What will be your point of difference from the competition and how will you maintain your unique position?
Taking the time to take a focused look at the competition, and how you plan to take your stand against the competition, will help you get clear on which way you wish to proceed (or not) with your business idea.