How to think of a Great Business Idea Your business idea may sound great to your family and friends but to turn the idea into reality you need to prove to yourself and others that it will succeed. The best way to assess whether your business will be profitable is by conducting a concise feasibility study. The result of the feasibility study will determine whether you should proceed with a full business plan, and in some cases, a feasibility study can replace a business plan. The main components of a feasibility study are: 1. Unique Selling Point (UPS) Quite simply you need to explain why will people buy your product or service instead of someone else's. Proving that your business is better than your competitors is crucial, you need to explain why your product or service will beat the competition. The main ways to beat competition: Price - are you cheaper? Convenience - are you based locally to your target market? Quality - is your product faster or more efficient? Guarantee/Warranty - Will you guarantee your product or service for longer than your competitor 2. Market Environment Analysis 1. 2. 3. 4.
You need to prove in this section that a market exists, or will exist for your product or service. Some market research is essential here. If you cannot afford a market research company it is possible to research your market for your self.
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Google - search engines contain lots of use information but be prepared to spend a long time looking for what you need. Libraries - most local libraries contain trade journals and local information you may find useful. If you live in London or are planning a trip there I would recommend a visiting the British Library, the Business & IP Centre is a fantastic resource for researching your business. Leverage your social networks - Use a company like Survey Monkey to send mail out
surveys to via email and your social networks to find out what people think of your idea. A couple well written tweets in peak hours may generate a response also. 3. Technical & Operational Requirements In this section you need to cover the basic requirements your company will need to operate. Its always best to plan the first year in detail then look at the next two years on a summary level.
● Offices ● Staffing ● Developers / Programmer ● Technological Support ● Distribution ● Logistics ● Administration 4. Financial Information Making money is the most important part of going into business, be very careful when you are working on this section. The main components you will need here are: ● ● ● ● ●
Revenue expectations for first 3 years of business Start up costs Ongoing expenditure for first 3 years of business Profit and Loss Account Cash flow
If you are finding it difficult to plan revenue and expenditure it maybe a good idea to download the annual statement of a start up company in a similar sector. Look how much their revenue increased in the first few years.