Testing the feasibility of a business idea can help you to begin to determine the strong (or weak) components of the concept and will assist you in examining how you could make it better or more relevant to the market. To avoid frustration and economic tension, it is essential to test the idea’s feasibility before you get started working on the product/service.
At times, business owners fail to separate themselves from the targeted customer base. Entrepreneur.com’s Jane Porter and outlines some of the important techniques and questions that will help an entrepreneur test the viability of the business idea.
Understanding the purpose of the product or service provided is important to assess consumer behavior and purchasing habit. If a similar product exists in the market, differentiating your product in terms of purpose and target audience will prove to be beneficial.
Who is your customer base?
Identifying the potential customer for the product or service is a key factor to understand the profitability of your business. If an idea is ideal for you, it doesn’t necessarily mean that it would work for customers. It is crucial to understand customer needs, requirements and expectations from the standpoint of a customer rather than business owner’s perception as a customer.
What resources do you need?
Converting an idea to a legitimate business takes a lot of effort and the use of many resources. In order to determine exactly what resources are essential and their associated costs, make a list of key assets you will need, from manufacturing/production to office space. This will help you to estimate investment cost and thus, comparative feasibility.
Who do you need on your team?
In the very initial stages of your business, you’ll want to also find a mentor or adviser who will give you honest advice about your idea. An honest, reliable adviser is one of the most important components of a business team.
Although many entrepreneurs start off working solo and doing the job of chief-everything-officer, it is not really possible to excel in every single aspect of business. This generates a need to hire employees or work with strategic partners to help with different facets of the business in which they specialize.
How much growth potential will the business have?
Every business idea has different growth potential depending on the kind of product or service available in the market and can differ from industries to sectors. Think about how big you would like the business to be and whether or not you’re selling your time or a product. It can be difficult to grow quickly if you’re hand-crafting items or writing software. Identifying the potential growth rate would allow business owner to get an insight on ROI as well the feasibility of the business in terms of revenue generation.
To learn about additional questions you should ask yourself when testing a new business idea, please visit:
Thanks for reading, and until next time… stay WISE!