4. Market Analysis

This is probably the most important item in this list, is there a market for my business idea? The numbers of business I have seen fail because the owners went out and invested everything they own in a business that had absolutely no market potential. Don’t let this happen to you. Do your market research. Find out if there are customers out there who are willing to part with their cold hard cash to acquire what you intend to sell.

How do you do this? Well you can hire a market research firm to do the basics prices can range from $1,000 - $10,000 but it is money well invested, it’s likely you would rather pay that than lose your shirt. If you don’t have the money there are a lot of tools on the internet that can tell you what is going on in the heads of your potential customers, Google your market see what is going on? Or simply you go out on the street and ask people, if you can ask 1,000 people if they would potentially buy your product and you have 100 people that say they would chances are you will have a great business.

5. Finance

Business finance is great... If you have a business! As you only have an idea it is probably good to prove your idea before you go out and get that million dollar business loan. This is the part of the idea trail that a lot of people have trouble with, as it is where you need to ask yourself can I convert my idea into money and can I make enough to cover business expenses and a loan payment, if you can, prove it by earning that money for three months on a smaller scale. Put aside the loan payment at the end of the month. That way you have proven your business can make money in your chosen market and you have enough money put aside for a down payment on the business loan.

If you absolutely can’t try your idea without finance, invest in more market research as your chosen financier will likely ask you for all this information anyway, but you will have a better idea of your position in the market.

6. Competition

Don’t have any competitors? Read on when you are done kidding yourself. Competitors exist in every single market; a good reality check is to have a look in your yellow pages online. Check the pages that cover the industry your idea will be in. Every business listed there is a business that cares so much about getting your potential customers that they have spent at times a lot of money to be listed and each one is a direct competitor. No seriously, don’t try to explain it away! “Oh they are not really in my market”; “they aren’t doing what I want to do”. They will be watching their market and if your idea takes off or damages their market they will move to your precise market quicker than you can say ‘Hey where are my customers?’

If there are a lot of listings don’t be disheartened, it could mean one of two things:

• It’s a great idea but the market is swamped with competition.
• It’s a great idea and there are a lot of customers.

If there are not a lot of listings it could also mean a couple of things:

• It’s a great idea but there are not enough customers out there.
• It’s a great idea and the market is under serviced.

Notice all results say it’s a great idea? That because a competitive analysis doesn’t tell you if the idea is good or not it simply give you some idea of the scale of your idea and how hard the road ahead might be. Get online, see what your competitors are doing. See how much they are selling their goods or services for as this will tell you what your market is like, and how much money you could potentially make. You will be surprised at how much strategic information your competitors give away on their websites. Mystery shop your competition. Posing as a customer, assess your competitions customer service and pricing. Be bold, ask for a quote from at least three competitors.

7. Online Business

Around 80% of people online make some purchases online (I’m not referencing this stat as it fluctuates and differs country to country but you can Google it here), so don’t miss out on this market. In today’s internet age if you are in business and not online, you are actually kidding yourself about the ‘in business’ part.

Get on Google or Yahoo and have a good search. You want to look at websites selling the same thing as you intend to, wholesalers that could help you with resources, subcontractors to farm out work to. Get a good feel for the entire idea and the market.

Get your idea online as soon as you can it will help you assess the market potential. You will need to at least consider having your contact details available online.

If your business idea can survive these simple tests, chances are that it is a good business idea that is worth more effort on your part to follow it through. Move on to developing your business plan, find a business mentor, work on that finance. Just get the ball rolling, don’t sit on the idea, it’s a great idea and the business stands to make you happy and a lot of money on the way.