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Tips for Evaluating the Potential of a Business Idea

Author: Ethan Ruth
by Ethan Ruth
Posted: May 25, 2017

Ready to take on the world of entrepreneurship? In order to find start-up success, you need a great business idea. That idea could be as simple as opening an artwork shop or as complex as creating a new biotechnology company. Either way, you need to take steps to evaluate the potential of your idea and your abilities to make it work. Hiring top consultancy companies will help you in the thorough investigation, review the potential and pitfalls inherent in the business, help you make an informed decision and increase your chances of success.

Here are few ways to evaluate your idea.

  • Self-analysis – This is the most crucial step as most small businesses fail because of poor management and owner’s inability to manage resources. Before researching the feasibility of your idea and the market analysis, evaluate your own talent, desires and goals. Consider your willingness to take risks as well as the amount of time and energy needed to make your business idea a success.
  • Identify a target market – The most important step of qualifying a business idea is determining who will be buying your products or services. Consider factors such as age, gender, education level, income and location. The more you narrow down the picture of your ideal customer the better. After you’ve narrowed down your customers, it is time for market research. Perform an extensive market analysis to determine the feasibility of your business. Consultancy firms can help you find how saturated the market is and can you add in your product or service.
  • Differentiation – How is your product or service different from others in the marketplace? If you have competitors, you need to identify what makes your product or service different from them. This can be done by creating a unique selling proposition (USP). USP identifies what makes your business different and why your target customers should choose you instead of your competitor. USP is a very effective tool in defining your brand and making your business memorable.
  • Financial feasibility analysis – Money is another important aspect that plays role in the validity of your small business idea. How much will it take to open your business? Where will that money come from? What will be your earning potential once the business is up and running? How will you bridge the financial gap between start-up process and profitability? You need to consider all potential capital sources.
As an entrepreneur, your dream is likely to make your business worth billions, but remember that many businesses fail and that is due to poor planning. Before investing in your business idea, create a plan and make sure that your idea excites customers.

About the Author

Ethan Ruth is a business consultant and marketing advisor with over 8 years of experience serving wide range of industries. He works for TR Consulting, a full range of professional business consultancy services provider in Melbourne.

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Author: Ethan Ruth

Ethan Ruth

Member since: May 25, 2017
Published articles: 3

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