Evaluating Business Ideas Before You Put In Your Resources

All business ideas have something in common, all of them sounds great when they first come to your mind

. Its only after you start poring over these ideas, the loopholes start to appear and sometimes these ideas are rejected right away, others are postponed and only few of them gets a go ahead. So far so good, but at times trying these ideas (and eventually failing) means a huge loss in terms of finances or other resources. Sometimes, it just happens despite careful evaluation and preplanning but most of the times it is a result of slipshod planning and little or no assessment. Given, that it doesnt take anything but some time to carefully evaluate a business idea, it is a must to scrutinize an idea before you invest, no matter how eager you are to give it a go.

Idea evaluation should always be carried out by more than one person (especially if the person is also the originator of that idea). If it is an expansion idea, the head of all departments should come together and discuss. If it is an idea about starting a new business, you should contact the experienced persons in your friend and families and ask for their opinion. Ask others to come up with constructive criticism and write down all plus and minuses, dont get too bogged down if you get negative opinions from most of your friends. Just compare pros against the cons and decide if the idea is worth giving a try or not.

Ideally the product or service in question must have some unique features; if the product is not unique then you must make sure that the demand is there. If the demand is not there and the product or service has no competitive advantage to boost, it will most probably be a waste of resources to launch this product. Make estimated figures of the startup cost and the cost of running the business and see if the idea is profitable or not, dont start some business for the sake of it. There are many aspects to peruse, for example the size of market, barriers of entry, exit plan (yes every business plan must have one), profitability, target market, pricing, etc. Also, you must do a test run before fully launching your product or service to see the actual demand, doing this test run will also give you an idea about your personal capacity and the possible barriers.

by: William

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