Starting a new business is one of the biggest challenges. There are always so many variables and so many things that can go wrong that analyzing all of them is the most time consuming but also the most important step before you launch your business. There are a lot of things that you need to think during the planning phase, but we have set out a below the 10 questions you should ask yourself when testing a business idea.
1. What is the customer profile?
Ask yourself who do you think is going to be interested in buying your product or service. Think about their age, gender, family situation, and income. Identifying your customer is a crucial step in determining how to reach your ideal customer, what is their disposable income, their habits and what is the correct way to approach them and turn them into a loyal customer.
2. What does my product or service offer? What is the value added?
There are very rarely brand new ideas. Look at what your potential customer could buy instead of the product or service you’re trying to sell. How is yours different? If it costs more, how can you convince a customer it’s worth the extra money?
3. How do I sell this idea to others?
Showing and selling your service or your product to a customer is not as easy as you might think. It is crucial that you identify a gap in the market that your product will be filling. Don’t try to compete with established players. Instead, try to think of something that you can offer that can feel different needs.
4. Who will I hire? Can I afford it?
No business owner can do everything. If you can’t afford employees, think about who is going to handle marketing, manufacturing, and other aspects of the business. The use of virtual assistants and remote workers is growing in popularity. This also brings greater flexibility and can be cheaper when compared to employees.
5. What do I need?
Make a detailed plan of everything you will need. Include starting capital, the amount of working capital the business will need in its early years, real estate, and any equipment. And the testing of this plan must be thorough, along with all other areas of this new business idea. All plans about the future are of course guesses, but the guesses need to stand-up being tested against the data you gather about your customers, the business environment, regulatory environment, competition, etc.
6. How can I turn my sales into cash?
Small, cheap items can be sold relatively quickly, bringing in revenue within a matter of days. Expensive equipment, however, can take months from the time the supplies are initially purchased to the invoice actually getting paid.
7. What’s a reasonable sales forecast?
Expecting your business to do as well as those that are already established is probably unreasonable, but it is a place to start. Try to be as conservative as possible with this projection.
8. How much growth potential does my idea offer?
While this will tie directly to your estimates and projections of your customer base, it is also important to come up with an idea of how long your product will last. Can you resell the same product to the same customers? How easy will it be to update your product? Testing these questions now with your business idea will save pay real dividends in the future.
9. Do I have the necessary skills?
Can you can turn your idea into a workable business. If there is a skill that you might not have and that you find as necessary, think about the person that you could work with who could fill in the gaps. Again, certainly at the beginning of the business think about the use of contractor roles such through virtual assistants.
10. Can you see yourself working on this project for the following years?
Launching a business takes time and dedication. Do you see yourself working on the same project and being as passionate, curious and devoted as you are now?
The article has been contributed by Sandler Training, a company that specializes management training in nj.