Monday, 15 September 2014

How to evaluate potential profitability of your business idea? NOT a Post Just to Read

This is NOT an article to read, this is an exercise for you to do.  So make sure you have a paper and a pen and you are ready to go!

The main idea here is to be honest with yourself and write down everything you think related to this testing because this is your tool to improve and make it working business. Like Russians normally do in business: the war will show the plan. Normally it shows they a lot of money can be lost together with time and efforts wasted.

READY - STEADY - GO:

Brief business description: my company is going to.... Just several sentences or bullet points to start with.

Have you calculated the cost of the creation and promotion of your business? 

What exactly do you want to offer consumers? Make a list of possible services and products. 

Your services and products are unique or you offer the same thing, and many others? 

What exactly is the uniqueness of your business proposal? What are you suggesting, that no one else can offer? 

Is there really an urgent need for your products and services? Why do you think potential customers will buy? 

Is the potential demand high enough for your business to be profitable? Do you know (at least approximately) the size of the possible demand? 

Estimate the size of the market and its dynamics (growing, stable, declining)? What volume (in euros, dollars, etc) you could expect? 

Objectives for the coming month/quarter/year. Any quantitative indicators you want to achieve? In what terms? 

How well do you imagine the process of bringing your ideas to the ready business? 

To what extent are ready your products and services? Do you need to refine it? 

How well do you represent a scheme of payment and delivery of your goods and services? 

How do potential customers learn about your existence and your services? What is your strategy for the promotion? 

List the ways in which you are going to spin your business (eg billboards, advertisements in newspapers (which), online advertising, banner advertising, through friends, etc.). 

Do you expect the appearance of regular customers or your services (sales) will be one-off? 

Whether you're planning a system of discounts and loyalty? 

Who are the potential buyer of your services and products? What is his income? If this firm or government agencies, what their size and profile? 

What is the number of potential buyers (per month, per week, per year)? 

Do I need your services (goods) to the buyer permanently or from time to time? 

How often will he buy? Will there be a demand for permanent or seasonal? 

How can affect the buyer's decision price change (increase or decrease)? 

Why is customer buys your product (or service), rather than the product of your competitor? 

How can affect the buyer's decision price change (increase or decrease)? 

How strong is the competition in this area? There is a place for you? 

Do you know your competitors? 

What is their strength? Their weakness? Have you done the SWOT or PESTL?

How your Competitors advertise their products? 

Describe the benefits of your services and products in comparison with competitors - price, quality, uniqueness, after-sales service, etc. 

Do you need staff? How do you they're looking for? What is the level of their qualifications you need? 

Do you have the wages of future workers? Will you be able to pay salary before the first customers? 

What forms of motivation do you suppose to workers (higher wages, bonuses, percentage of profits, sales, etc.)? 

Do you need an office or business premises? Do you have something in mind? 

Have you calculated the total cost of the organization and promotion of new business? Do you have the funds? 

If not, how big is the probability of obtaining a loan, investment, partners?

IF YOU ARE READING THIS SENTENCE, I'm sure you have enough drive and persistence to succeed as an entrepreneur! Good Luck!