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How to determine the potential of a business idea

How to determine the potential of a business idea

Before investing in any business idea is important to determine its potential and market prospects.

This requires to take into account some important parameters and criteria.

What is necessary to determine the potential of a business idea

Opening any new business or expansionscope of existing, should begin with an assessment of potential business ideas. This should be done not only to provide a business plan to a bank or a potential investor, and, first of all, for yourself. After all, good planning and forecasting - one of the keys to a successful business.

The potential of a business idea - a projected estimate of maximum production and consumer market opportunities.

at stake are often worth a lot of money, and in orderto not only lose, but to increase their capital, it is important to fully determine the potential of a business idea. And if the case is opened for credit or borrowed money burden of responsibility more, because the need to urgently close, and the debt will remain a failed business investing.

Criteria for assessing the potential of a business idea

It may happen that the idea aroseyou think it is interesting and promising, but in fact will not be in great demand among consumers. Therefore, any aspiring entrepreneur should look at the idea from to answer a number of important questions:
- What problem your product will solve, who is the target customer, whether or not this issue is important to them and there is a market demand for your predlozhenii-
- What is the demand for the products that you are going to offer and whether it points to a potential rosta-
- Is your product production economically feasible and whether it will be able to bring substantial revenue.

The potential of a business idea - a projected estimate of maximum production and consumer market opportunities.

If the answers to these questions will not be difficult, you can further approach to the assessment of the business idea.
Of course, the main criterion for evaluating potentialthe idea is its profitability. It is therefore important to evaluate its parameters such as sales, projected profitability, payback period. To assess the potential income you need to understand the actual total volume of the market and its dynamics (sales are growing or shrinking) and try to predict their own market share, based on the production capacities and competitive advantages of the product (service). If this idea is innovative for Russia, it is possible to try to estimate its prospects based on an analysis of the global market.
To assess the prospects of the market is to compare the real consumption and its potential capacity.

The market potential is different from the real consumption (market volume), it is the upper limit of sales, which is achieved under favorable conditions.

It is important to understand and own advantagerelation to the same goods and competitors. You need to create a unique product offering, which will be briefly formulate the competitive position of the distinguishing features of the product and its uniqueness in the eyes of consumers. Optimally choose unsaturated market niche.
Finally, it is necessary to determine the forward-looking indicators of consumption, taking into account the complex influencing factors. This can be done both on the basis of the previous speakers, or to use expert estimates.

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