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November 8, 2013 / cbkingston

Evaluating your Business Idea

Here are five questions that can help you evaluate whether a business idea is worth pursuing:

1. What do customers currently do to solve this problem?
Are you offering a cheaper/faster/simpler/more attractive way of solving that problem? If the answer is no to all of these questions, your idea is not worth pursuing.

2. Is there already an established market solving this need?
If so, how will you compete? If not, how will you educate your audience to use your solution you offer?

3. Are you able to manufacture this product/service at a price for less than what people are willing to pay you?
If so, is that amount enough to live on? Invest in future products? Do you receive the payments from customers in time to pay for your costs?

4. Is the market large enough to produce a profit to sustain your business?
Is it seasonal? Do you encourage repeat business? Are there enough people willing to pay for your product?

5. Is this something you enjoy doing? Do you care about your customers in a real way?
What will keep you motivated to continue working on the business when sales are slow or you run into development problems, etc?

Looking at these questions will help you to evaluate your idea before you develop a business model to support your idea. There’s no point in determining what sales channels to use if you can’t afford to make the product, or fine-tuning what your UVP/USP is if there is a free useful solution to the problem already out there.

What other questions would you add to the list?

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