So you’ve got a business idea but you’re not sure if it has profit potential? You’ll need to carefully evaluate the risks and rewards of any business opportunity before deciding to take the plunge.
We’ve compiled five key issues to review before pursuing a new business venture.
1. Does your business idea solve a problem?
“According to Mike McGee, an entrepreneur and the co-founder of web design school The Starter League – which has been acquired by Fullstack Academy – feels that the best business ideas solve a problem in some way.
“If there is a problem that affects you, your friends, family and co-workers, then the chances are high that it affects people you don’t know as well,” McGee said.”
Source: Business News Daily
2. Target market
“It’s vital that you determine who your ideal customer is: who will be buying your product or service? The more specific you can get, the more likely you will understand how to design the marketing strategy of your company—think about their gender, age, weight, interests, education level, lifestyle, occupation, income, and location.
If you’re stuck, focus groups and surveys can help you better understand the pain points of your demographic. Once you’ve narrowed your target customers as much as you can, you’ll want to conduct a market analysis (also called market research) to determine how big (and how saturated) the market is for your product or service.”
“Does the business opportunity come with some relationships? For example, do you have an “in” that can help you leverage the opportunity? If you know someone who is technically minded, that can help you with certain aspects of the opportunity. What are your relationships with potential investors or customers? When you have more relationships, the opportunity is likely to run smoother.”
4. Cost analysis
“How much will it take to open your business? If you have family obligations, you’ll probably have to pay yourself, adding additional costs to your budget. How will you get the money? Recently, Washington passed the JOBS Act, a law that made crowdfunding legal. This may provide a way for small businesses to gain funding without the use of banks or venture capital, but even with all of the recent legislation, businesses are finding it difficult to secure funding.”
5. Analyze your competitors
“It’s important to know more about potential competitors so you can see what they’ve done to find success and make sure you can supply a unique or higher-quality product or service. To analyze your competition, gather information about the company and its offerings and write an observational list of its strengths and weaknesses. Search online to read reviews about the company’s products, pricing and customer service.
Once you know more about the competition, you can identify ways to distinguish your business idea. Think about why a customer might purchase from you instead of a competing business. You can even write a unique value proposition that tells customers what you offer, how it differs from the competition and why it meets their needs.”
What is Your Business Idea?
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Our loan products range from $5k to $1 million; we have the resources to get you the money you need, fast.
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