How viable is my business idea?
If you decide to go ahead, it's time to turn the spotlight on your business idea. You must have goods or services to sell and they must be in sufficient demand, in both good and bad economic times, to generate a satisfactory profit.
Ask yourself some questions about the type of business you're proposing. Have you:
- had previous experience related to the product or service?
- sought professional advice?
- conducted market research to see if there is a need for your product or service?
- contacted the appropriate industry association?
- questioned others already in the type of business you intend to start?
- read relevant industry publications?
- sought the opinions of potential customers and suppliers?
- got sufficient money to start?
Think about the points of difference between your business and your competitors:
- do you have a better product or service?
- will your price be competitive?
- will your location give you an advantage?
- is your proposed method of distribution superior?
A feasibility study is an initial assessment of a business or business idea and is part of the business planning process. If the business is deemed feasible, the information that is gathered and evaluated can be used to prepare your business plan.
A feasibility study can help you discover:
- whether the business will be viable
- the level of risk involved
- what return on investment you can expect
- the amount of money the business requires to be established and the working capital needed
- if an existing business, whether the asking price is reasonable
- when the business will reach break-even point
- what business skills will be critical to success
- any deficiencies in your skills and how they can be addressed
- any legal issues that need to be addressed.
You may also need to show your feasibility study to others such as business partners or potential investors.