You have a business concept that you are excited about. However, you are unsure whether it is feasible. You have to test the idea to know how it withstands a list of strenuous concerns.
You are constantly testing.
Because whatever you started out is seldom what you ended up with. What is your client profile? Perhaps your service or product or appears like simply the best solution for you.
However, are you able to identify a clear client base beyond yourself? What are your clients’ greatest problems? How can your service or product help resolve them?
It is crucial to understand and segment your market. What are you replacing? Whatever your business concept is, somebody out there is purchasing something else in its place.
What makes your service or product so compelling to replace what is currently in the market?
This does not limit to a service or product to have a similar function as yours. You might want to study your target clients’ spending habits. And think about how you might get them to purchase from you instead of someone else.
How do you show this concept to others? Make your concept as concrete as possible. That could mean creating illustrations or a working prototype.
The ability to demonstrate your concept to other people is very important. Who do you require on your team? In the beginning phases, you will have to determine whom you can rely on for honest feedback on your concept.
You will also have to consider whose brainpower you desire on your side.
Be it product development, IT, marketing, or another function. Look for ways to approach such people. And assess their interest in your concept.
What resources do you require? Ask yourself what you will require. From computers to office space.
Make a list of all the essential assets. And determine if you can acquire them. Prior to you investing money and time in product development and testing.
How long is your purchase cycle?
You need to know the purchase cycle for your service or product so you can plan your cashflow. For a longer purchase cycle, you will require more money upfront before you begin generating income. For instance, selling medical equipment to a hospital might take a year to complete.
While a mobile app can be sold for immediate download. What is a reasonable sales projection? You need to evaluate the actual business operation in order to come up with an accurate sales projection.
For instance, a restaurant projection would consider the seating capacity, the expected average bill, and the hours of operation. How is the growth potential of your concept? Consider how big you want your business to be.
Find out if your business concept can meet your expectations.
For instance, making something by hand may not grow as fast as making something that can be mass produced. Are you selling your time, which is limited? Or are you selling a service or product, which is unlimited?
Very often, this is not apparent to people. Do you have the required abilities? Having a concept and making it happen are two very different things.
Be truthful in evaluating if you are qualified to materialize your concept into a business. If a concept needs high technical abilities or business experience that you do not have, are you able to find people to fill those gaps? Can you do this for the next two years?
Developing a concept can be exciting.
But will you be committed to it for a minimum of the next two years? Do you have support from family and friends? Are you ready to make the necessary sacrifices?
You need to look at opportunity cost. And understand that any new venture is going to take an astounding amount of time and energy.