Assessing business ideas is so important in business. You have to evaluate viable business ideas. You do this by looking at the demand for the product or service, available resources, skills, talents and knowledge you have. With this simple process, you take ample time to reflect on all the business ideas and income-generating activities you have created. Select the three most promising ideas, looking critically at the pros and cons and basing on your experience and judgment.
When assessing the business ideas you have selected, tally the results of each business idea using a table. Categorise them into columns of skill and competencies, available equipment, access to raw materials, financial resources and enough demand. Then use the questions below to help you:
1. Which of the categorised business ideas matches my strengths?
2. Which one(s) can help me achieve my personal goals?
3. Which resources do I need to realise the business idea?
4. Which gap am I feeling in the market? Is it a need or a problem?
5. Are there people who will buy my product or pay for my service?
Assessing Business Ideas Based on Your Skills, Talents, Knowledge and Competencies
Skill Assessment
First, when assessing business ideas, you should analyse the extent to which you have the required skills (manual, personal, social, technical). If you don’t have the needed skills, you should think about other options like finding some skilful person to help you.
As you look for someone else with the skills, you should again ask yourself whether you will afford to pay for this person to contribute to your business. Remember that any costs from employing someone might mean a reduction in your profit.
If you find that you can perform the required skill without any problem, that idea should receive a high ranking. But if you find out that your skill level is low or nonexistent as far as the ability required is concerned, then you should rate the idea low.
Secondly, when assessing business ideas, you should look at the future of the business idea. Ask yourself which other secondary skills you have to acquire to fulfil your business goals. Additionally, how are you going to get them?
Assessing Business Ideas About the Available Resources
By resources, I mean financial resources, human resources and inputs like raw materials. You’ve to think about the start-up and working capital. You can begin humbly and grow your business gradually.
However, you should consider the financial resources you have to invest in buying equipment and start-up expenses. Think of having cash that you’ll use to meet the daily requirements of running your business. A positive rating only applies when you can have all the money required to start the business. And a poor rating implies that you cannot have anything to start the business.
Secondly, when assessing business ideas, focus on other related inputs like equipment and raw materials. When using a specific machine, you may have to possess individual skills. Look at the availability of the equipment, now and in future, and the challenges you may encounter when using it.
You use raw materials to produce the product. A good business must have a steady inflow of raw materials, and their availability is crucial. If they are readily available, then give yourself a high score. But if there’re problems or seasonal fluctuations in the availability of raw materials and price, then the score is low.
Assessing Business Ideas Based on the Demand for the Product or Service
Product Demand
Concentrate on your unique selling proposition, something special about the idea that can make it more attractive. The demand for a product is the extent to which customers want it. You have to consider the competition level in the marketplace. The demand for a product is also related to the ability of the targeted customers to buy. They may need the product or service when they have no money to pay for it. In such a situation, the actual demand is low.
Having gone through the process, select one business idea that has the highest number of scores and note down the points using the guide below:
1. What’s the business idea and its status?
2. What market does it address? Is there any customer feedback or testimonials?
3. Why do you think you have the advantage in the market concerning the market needs?
4. What’s the competition in the market?
5. Who are the people that will make the business succeed?
6. What is your long-term vision for your business and the expected returns on investment?
7. What is the estimated total funding needed to execute the business plan?
8. Which funds are you seeking initially?
Finally, assessing business ideas requires a proper write-up of the analysis. It’s essential for you to develop a business plan and to convey all the necessary information more transparently and concisely. It enables you to communicate in a friendly, passionate and credible way to attract the attention of others, especially the people you need to help you as you start your business. Do you have any more information on assessing business ideas?
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