How to evaluate a business idea: a step by step analysis

Do not grab the implementation of a business idea just because you are in love with it. Try to look at your own plan with a skeptical look of a bystander.

We offer questions that will help analyze the pros and cons of your project.

The real reasons for choosing

To begin with, analyze not so much the idea as the circumstances that gave rise to it . Honestly ask yourself: “Why does such a project attract me?”

The correct answer is one (because the case seems promising), and the wrong ones are many. For example, in no case should one create a business on the foundation of blind faith in the authority of some adviser.

Personal interest in the product is also a rather weak reason. If you are madly in love with Chinese dishes, this does not mean that the residents of your entire neighborhood will like them.

Market condition and competitor positions

You are unlikely to come up with something fundamentally new. Most likely, similar products and services are already on the market. Find out how companies of potential competitors live :

  • How long have they been kept afloat?
  • what is the condition of their equipment;
  • to which their customers / visitors / customers are happy and dissatisfied.

It is not too difficult to get information – enter the role of a demanding customer and look in the nearest offices or in stores of the profile you are interested in.

Organizational details

An important point is the need to issue licenses, certificates, patents . Specify what regulatory restrictions apply in this market.

Ask about the available benefits. In many regions, developed a good program to support small businesses. Often they are focused on the development of a specific industry – agriculture, tourism, etc.

A recent student will be very helpful to participate in projects for young startups (“You are an entrepreneur”, etc.).

Mathematical calculations

You will probably need to buy equipment, rent premises, pay for the labor of employees. How much money do you need to start? Can you get such a sum?

Banks advertise loans, but they are not given to anyone. They are primarily interested in customers who already have a steady income.

Investors, too, do not go after startups on their heels. In order for a successful businessman to agree to invest in your business, you will need to make a strong case for your venture. The ideal argument would be a well- developed business plan with optimistic (and – believable!) Data on the likely payback period.

If you have a vague idea of ​​how to carry out these calculations, but do not doubt that you came up with the idea for a million, spend a few tens of thousands on cooperation with a reputable consulting firm. Even a negative professional forecast will be a profitable result for you. It is better to lose a small amount than to get into huge debts for the sake of a beautiful illusion.

Volie Septing

One comment

  1. Peace to your home. Thank you for the wonderful articles.

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