Business Opportunities – Which Business Idea Is Right For You?

Many entrepreneurs decide to go into business and then search for the ideal business concept. There is nothing wrong with this approach, but it does raise the question of how to determine which business opportunity is right for you and if the business idea is worth pursuing. The formal business planning process provides for this type of analysis. It is a process that helps the small business owner take off the ‘rose-colored glasses’ and research the business idea based on hard facts and realistic analysis. The planning tool used to determine the viability of a business opportunity is called a feasibility study.

The goal of the feasibility study is to minimize the degree of risk that a business owner is about to take on. Upon completion of a feasibility study, you should be able to conclude whether the opportunity has potential for profit and is therefore worth investing your time, effort, and funding. If the study shows that the business idea is financially viable, much of the information collected can be used in formal business planning documents.

A word of warning, curb your enthusiasm for a business idea until you after the feasibility study has been completed. Don’t spend a hundred, don’t sign anything, don’t start anything. Heeding this one warning could save you a lot of money, time, and pain.

A detailed feasibility study should include:

The Business Opportunity

Begin with a description of the business opportunity in as much detail as possible.

legal restrictions

You should investigate if there are any legal restrictions to doing this type of business. This could include regulatory requirements for specific qualifications or licenses. Home-based businesses generally require permission from the local council to operate from home. It doesn’t make sense to jump into a business that requires qualifications or licenses you don’t have.

Market and Clients

You must conduct market research to determine the size of the market for your products and services and outline the characteristics of both the market and your potential competitors and customers. You should also assess whether you can offer something unique, better, or different than what your competitors are offering, and determine likely purchase quantities and price points for your products. Your market research should also include identifying any issues that may affect the market or industry in the near future.

operational problems

Operational issues such as the location of the business and the type of facilities required need to be researched and addressed. Examine the space required immediately and assess whether it will be adequate given the growth of your projected business over various time frames. He asks how you will identify the most suitable location and type of space.

You should also consider how you will finance the required space. Will you buy, rent, or enter into a long-term lease?

Examine the logistical aspects of business operation, such as how will you handle, transport, and store goods in and out of your business? What distribution channels will you use? Do you need transportation such as a car, van, truck or forklift? What other plants and equipment are needed to start operations and what is needed during the life of the business?

Management skills

This examines the management aspects of the business. Ask what types and level of skills are required to run this particular business. Who will manage the business? What roles are required and who will fill those roles? This includes marketing, finance, sales, information technology management, etc.

Essentially, you need to examine the skills required by this business opportunity and compare them to your own skills. Do you have the skills required to start this business? If not, can they be easily purchased? Are you interested in acquiring these skills?

organizational skills

This examines the skills required by the business. Ask how many additional staff will be required to operate this business idea. Will you need to recruit new workers? If so, what skills and proficiency levels will be required. Do you know how to recruit these staff members and can you effectively induct and train these new recruits?

Do you have enough knowledge about the legal aspects of hiring staff? Are you aware of regulations related to wages and salaries, taxes, workers’ compensation, workplace safety, and equal opportunity? Do you know where to go for this information?

Financial problems

This takes a detailed look at the financial issues related to the business idea. This includes all the important questions of what capital is required to start the business and how you will obtain the required capital. What is your estimate of profitability after deducting all costs, including taxes? How much do you need to live per year? How long will it take to break even?

You also need to examine your own skills in relation to managing finances. Are you able to do your own bookkeeping? Can you manage the cash flows? Do you know where to go for expert financial advice?

Sales and Marketing

This looks at what you expect your sales and marketing strategy to be. Examine how much time and money will be allocated to the sales and marketing function and determine what the most profitable promotional methods should be. He also asked who would be responsible for this function.

recommendations

The above is not an exhaustive list of questions to ask when conducting a feasibility study, but it does give you an idea of ​​what it should be. When you have done your research and found answers to the key questions, you will be in a position to conduct a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It allows you to take all the information you have collected and make an overall assessment of the viability of the business.

Carrying out a feasibility study sounds like a lot of work, especially when you’re itching to get started, but if you want to save yourself a lot of time, money, energy, and pain, take the time to assess whether the business idea is really worth it. your investment A feasibility study can help you sift through a large number of business ideas and allow you to weed out those that aren’t worth your time and help you identify the one most likely to succeed.