Every day in the minds of hundreds and thousands of people come up with wonderful business ideas that could bring multimillion profits. But these ideas never come to life because people do not know where to start.
Usually such losers justify their indecision that they do not believe in the success of their ideas. But, instead, to succumb to the mystical fears, is to analyze the situation and give an answer at least those questions which lie on the surface:
- If a potential customer is to pay for your product/service? Even if your first estimate is very approximate, anyway it’s better than no forecast. Meet with prospective clients (people who in future may be interesting for what you plan to do). A few strokes describe your product or service, but not to go into details. Watch the reaction. Usually people are very easy to determine if they are willing to pay money for an idea that I just heard.
- Guide primary market research. If at least one of the five potential customers (which were discussed above) have shown a willingness to pay for your idea – so it’s time for market research. And if earlier such a study would require significant capital investment and attracting professional researchers, today for surface studies may be sufficient to use the free services of Internet search engines (such as Google, Yahoo or Ask).
- Carefully calculate how much it will cost to create your product/service. This step is very important. Do not blindly assume that if company a sells a similar product for a certain amount, you can sell it a bit cheaper. Maybe company “A” use this product only as bait in their more expensive products and services, and as a consequence loses money on it. In this case, you will not be able to make the price even lower. So check the return of the goods – is absolutely imperative.
- Determine who specifically will deal with selling of your product/service, and what portion of the profits will have to pay them. This proportion varies significantly, depending on what type of trading you will do: retail, wholesale, and possibly direct sales.
- Analyze all obtained data and make a decision whether you want to further develop this idea. Simply put, add all the funds for the production/support of your product/service, the salary of the sellers and other possible expenses and compare that amount with the performance of your competitors (if you get access to it, of course). And remember – it is not necessary to abandon the idea just because your spending a little more than the competition. If you have differences that can be valuable to the customers – maybe worth a try. But if your model down to the smallest detail copied from the model of a competitor (apparently unsuccessfully copied, if your expenses are more) and you can’t offer the consumer anything new – not even try to break into the market.
And let your business be successful!