How to Evaluate a Business Idea!

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How to Evaluate a Business Idea!

• Choosing a Business Learn How to Evaluate Your
  Business Ideas

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Starting a Business

• Starting a business is easy!
• Deciding on what business to engage in is the
  difficult part.
• There are hundreds of ideas you might think of
  that could bring in income.
• How do you know which of these business ideas
  will bring you success?

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What is needed to be successful?

• Hard work
• Positive attitude
• Offer a quality product or service
• Utilize strong marketing and management skills
• Determine if your business idea is strong and
  valid

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Criteria to Evaluate a Business Idea

• Ask yourself the following questions when
  evaluating an idea for a business venture

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1) Does it satisfy a market need?

• Conduct Market Research!
• Find a Need and Fill It!
• Do Not Offer a Product or Service that is so new
  or unusual, people will not understand why to buy
  it!

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2) Will the product maintain appeal?

• Beware of Fads and fleeting trends!
• If your product is a fad, move quickly to make
  sure you can capitalize on it before it dies!
• Is your product or service appealing nationally
  or just meeting the needs of your local
  geographic area?
• Check out the competition

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3) How unique is your product?

• The goal is to differentiate your product from
  the competition
• Show how your product is unique, different or
  superior to the competition
• Potential customers must find MORE value from
  your product to capture the market share

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4) How useful is your product?

• Many new ideas and products are successful
  because their creators identified an unmet need
  in the market.
• How will your product be used?
• How often will your product be used?
• Some businesses help create a need (desire?)
  through promotional advertising and promotions.

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5) How much competition exists?

• You will always have competition!
• Determine the kind of competition you will have
  locally, regionally and nationally.
• Look for heavy or moderate competition (the fact
  that competition exists proves there is a demand
  or at least a need for the product or service you
  have to offer).
• Test for market saturation!
• Lack of competition could mean that your idea is
  not profitable to begin with.

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6) Have you priced your product competitively?

• The right price for a product or service is one
  of the essential elements in a solid business
  model!
• The wrong price tag is a ticket for disaster
  (economic survival is a primary consideration)
• Your price should meet three requirements It
  should match the competition It should be
  attractive to customers It should earn you a
  profit

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7) What is the level of difficulty in the
creation or implementation of the product?

• You need to consider time, capital investment
  needed, marketing costs, personnel needed.
• Do you have the engineering, production, sales,
  and distribution facilities needed?
• You may have an excellent business idea, but you
  also need to consider the economics needed to
  produce it!

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8) What are the growth possibilities?

• Can the demand for your products or services be
  expected to grow or change with the economy?
• Can your product or service survive a major
  technological surge or obsolescence?

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9) Can I get backend sales?

• Back-end sales are all the products or services
  you sell and resell to customers or clients after
  they have made their initial purchase.
• Will your product or service warrant repeat
  sales?
• There is real value in building a pool of repeat
  customers.

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10) Is the product safe?

• Safety is an important consideration for many
  customers!
• You need to be sure that your personnel are
  properly trained to satisfy customers.
• Educate your customers on how to best use the
  product include clear instructions!
• Be sure your business is insured against various
  forms of liabilities.

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11) Can my product be promoted with strong
advertising?

• Emotion sells! People are motivated to buy
  because of emotions greed, fear, want etc.

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12) Will you be left with Inventory?

• Avoid inventory risk! Would you buy this product
  or service?
• Insure inventory against disasters- fire,
  tornado, hurricane, etc.