Do you have a business idea that you are excited about but are not entirely sure if it is achievable? Then, you need to put the concept to the test and see how it responds to a series of rigorous questions.
Here we give you ten basic questions that you should ask yourself to evaluate your business idea before embarking on the entrepreneurial adventure:
What is the Profile of your Consumer?
Your product or service idea may seem like the perfect solution for you, but can you identify a consumer base beyond yourself? Ask yourself what your consumer’s problems are and how your product or service can help resolve them.
What am I Replacing?
Regardless of what is your idea, someone out there is buying something instead. So ask yourself what makes your product attractive enough to replace what is already on the market.
It should not be limited to those products with purposes similar to yours. You can also look at your target customers’ shopping habits and consider how you can get them to buy your service or product instead of what they currently spend.
How can I Demonstrate This Idea to Others?
It is possible to make your idea tangible. That can mean creating sketches or working on a prototype. By thinking about how you can easily represent your idea to others, you will begin to see how strong it is.
Who Will I Want on my Team?
In the advanced stages, you’ll need to identify who you can turn to for honest and informed advice on your idea. And soon, you will also have to think about those whose intelligence and skills you would like to have with you, be it for product development, marketing, or any other area. Find out how these people can be interested in getting involved with you.
What Resources do I Need?
How can you make this idea come true? Answering this question requires you to consider what resources you need, including everything from production factories to office space. Make a list of critical resources and think about how you could get them before spending a lot of money and time testing and developing the product.
How Long Will my Purchase Cycle be?
You should know what the purchase cycle of your product or service will be so that you can estimate your cash flow needs. The longer the cycle, the more money you will need to keep before making a profit. For example, if you sell technology for a hospital, your purchase process will take around 18 months, while if you sell a mobile application, the purchase will be instantaneous.
What is a Reasonable Sales Forecast?
You need to analyze the business operation enough to have a solid sales forecast. For example, if you wish to open a restaurant, do not just base your forecast on the restaurant’s annual sales in your city. Instead, consider your restaurant’s size and capacity, average bill, and hours of operation for a more specific estimate.
How Much Maximum Growth Potential my Ideas offer?
Think about how huge you want your business to be and see if your idea matches your expectations. For example, if you are making software, building simulators, or doing something by hand, you must know that you cannot grow the same as if you were doing mass production. Are you selling your precious time, which is finite, or are you selling a product that you can trade in the millions?. Many times, this is not obvious to some people.
Do I Have the Necessary Skills?
Having a good idea and implementing it are two very different things. Be honest when evaluating whether you are qualified to turn your idea into a business. If an idea requires highly technical experience or skills that you lack, could you find someone to take care of it?
Can I See Myself Working on this For the Next Two Years?
Having an idea can be exciting, but are you willing to spend your life or at least the next two years on it? Do you have the support of your friends, family, and mentors, and are you willing to make the necessary sacrifices?