The Business Idea Litmus Test

Have you ever had a brainstorm for a great business idea? Of course! We all have had these brilliant flashes of genius. Sometimes we tuck them away for later use, sometimes we start furiously writing the business plan. In a lot cases, people are not sure how to start figuring out if the idea is a good one or not. Here are some key questions to help you get started before putting the effort into a business plan or tossing the idea aside:

What are you selling? This is the most important thing to start with. Do not describe your company idea here. Simply state what product or service you will be selling. The key here is to focus on the transaction you will make with your customer.

Who are you selling to? Name your target customer. Describe their needs and wants. Figure out how many of them are out there. Determine how many could be your customer. State how you will put your product or service in front of them for their consideration.

Who else is selling to them? Ideally your product or service is unique but even if no one else in the world offers what you have, you are still competing with something else. There is always something else competing for your customer’s attention and money. Most people see thousands of product offers each day. How will you grab your target customer’s attention?

What resources do you need to fulfill an order? Do you need to hire people? Acquire property or machinery? Partner with foreign producers? What is it going to take to put the product or service in your customer’s hands?

How much does it cost? What will it cost for you to produce the product or service? How much will you charge?

How many orders do you need to sell to pay yourself a competitive wage? You need to pay yourself to succeed in business otherwise it would be more lucrative to work for someone else. This is a key step not to be forgotten.

Once you can answer these questions and feel confident about your idea, then it is time to look at doing some business planning projections.

If you would like additional information on this topic or a free consultation on your marketing efforts, please contact a Thrivepoint advisor.

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