Assessing the viability of your business

October 18th, 2012 by

So you’ve had your great idea, the masterstroke that surely guarantees your business success. But just how well will your idea translate into a successful business model? There are other hurdles to jump before you can be confident that your business is going to be viable.

First, you need to establish what the potential market for your business looks like. To do this you need to conduct market research around your chosen field. This will help you to determine things like the customer base you are hoping to reach, how big it is, how your marketing should be directed, how your customers are likely to shop and how you should price your products. Without this key information you are starting a business blind and risk misunderstanding your market.

There are two forms of market research, primary and secondary. Secondary research is looking at studies, statistics and articles that will help you to learn about the market you are attempting to work in. Search online or ready industry publications for useful information that is available at little or no cost.

Primary research involves doing your own research using a questionnaire or focus group. This allows you to find out information specific to your idea such as whether people are interested in your, what would make them more likely to do business with you and how much they would pay.

The next thing you will need to look at is the saturation of your market. Depending on the originality of your idea and the size of the market you are looking to work in, there will be varying space and competition for your business. Do you have unique selling points that will drive customers towards your business? If your idea is completely original, is there anything to stop a larger company copying it and using their status to have greater success? Furthermore, if it is something that’s never been done before, could there be a reason for this?

Lastly, you need to look at where the money is coming from, to get the business started and to keep it going. Start-up costs can be substantial, especially if the business requires full time staff, a bricks-and-mortar location or large amounts of stock. You need to look hard at whether you can afford to fund the business, even in the worst case scenario. Staying in denial about potential costs down the line is only going to make them harder to deal with when they arrive.

If your idea passes these tests then you may well have a viable business on your hands. With a strong product, good marketing and a lot of hard work you could be on your way to a successful career in your chosen industry.

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