New opportunities for small business owners are always out there, provided entrepreneurs perform due diligence before taking the plunge. After a business idea occurs, the first steps should involve in-depth evaluation to make sure the idea and venture have merit. Evaluating an idea involves careful examination of the feasibility, the uniqueness, market analytics, and costs involved in launching and maintaining the business. After analysis, it may be time to take the plunge and start a new business. One of the biggest keys to starting a successful business from a great idea is comprehensive planning. Planning makes sure that the idea is solid and that the steps involved in selling a service or product to customers are feasible given market conditions.
The first step in evaluating a business idea is to evaluate the overall need for the service or product. The intent and purpose of the business need to fill a need in the marketplace. After establishing a need, the next step involves surveying the targeted population to determine whether they would find the service or product appealing and whether they would be likely to make a purchase. While surveying over the Internet either on social media or by targeted email are options, it’s useful to expand this process to also include face-to-face evaluation at a place where the people would be potential customers. Having these personal conversations with potential clientele gives an entrepreneur invaluable opportunities to gather information that can be used in product development and niche marketing.
- Feasibility Checklist (PDF)
- Evaluating Your Business Idea (PDF)
- How Entrepreneurs Identify New Business Opportunities
- Idea Assessment and Business Development Process
- Entrepreneurship 101: Keys to Starting a Business (PDF)
Differentiation and Distinction
Differentiation and distinction pertain to the uniqueness of the business from other companies in the marketplace. If other businesses exist in the targeted market, a new business must succeed in finding a niche or a reason that customers will choose the new business over competing companies. Blending in with the competition is not the goal for a new company. A unique selling point is crucial for a new business to create a specific niche in the market. The unique selling point might be a lower price, more broadened services, or a compelling product that has unique features that set it apart from similar existing products. Most new companies should strive to avoid direct competition with established companies, as this tends to be challenging for the newcomer.
- How to Predict if a New Business Idea is Any Good
- The 5 Basic Steps for Bringing Your Business Idea to Life
- The Elements of a Business Plan: First Steps for New Entrepreneurs (PDF)
Market analysis involves examining the size of the market, the types of consumers served by this market, growth potential of the market, and potential advertising expenses necessary to capture a sufficient share of the market. Next, the entrepreneur should move on to exploring market analytics, which involves an in-depth evaluation and analysis of the market to determine the share of the market currently held by established companies. Learning this information will enable an entrepreneur to calculate remaining market share that is up for grabs. With this evaluation completed, the next step involves a comprehensive strategy for obtaining the available market share with the new product or service. The devised strategy must be strong enough to gain a sufficient customer base to make a profit. For the most success, an entrepreneur should focus efforts on meeting a need that is not yet met, not in jumping into a market that is already saturated with similar companies producing similar products or services.
- Identifying Venture Opportunities (PDF)
- Collaborative Marketing: Identifying a Need
- Market Research and Competitive Analysis
- Market Research for a Business Plan (PDF)
- Conducting a Competitive Analysis – Is There Room for Your Business?
Costs and Expenses
New business costs encompass the funds it will take to launch and maintain a business, including all start-up costs such as a lease, inventory, equipment, insurance, and salaries. An entrepreneur also needs to factor in a personal salary to these expenses, especially if family obligations require monthly income. Planning the way revenue will enter the equation and how it will be utilized is crucial. Many entrepreneurs turn to some sort of funding to cover start-up costs, such as a small business loan or even crowd-sourcing to gain access to money needed to cover expenses until revenue begins to come in regularly.