Steps in Selecting Business Idea
What are the various criteria and steps in selecting a business idea?
Before a business idea is arrived at, there are several steps and criteria used at reaching a conclusion on the type of business to be started.
This article sheds light on these criteria and techniques in selecting a business idea. The criteria and techniques that follow provide a better understanding of the requirements needed for concluding the type of business to be engaged in.
The following are the criteria and techniques used in selecting a business idea;
METHODS AND KEY CONCEPTS IN SELECTING A BUSINESS OPPORTUNITY
Follow Your Passion
Passion is one of the most important criteria and techniques in choosing a business idea.
Without passion, the business idea selected will not stand the test of time, as it will certainly show during trying times for the business.
Going with your passion increases the chances of establishing a well-run business which eliminates effort, but engenders love for the work, thereby increasing the commitment level for the business.
This is the first consideration to be made when selecting a business idea. There are a lot of niches with varying interest levels for entrepreneurs. Therefore, gravitating towards your most preferred niche is an important criterion for starting a successful business.
Following your passion is not enough, as it also requires carefully testing the idea to ensure it is implementable/viable.
Choosing an Edge that is Difficult to Replicate
There are a lot of businesses that are well funded and have the capacity to be in the game for a very long time too.
These businesses are the major players in different industries where they operate.
When selecting a business idea, it is necessary to take this into serious consideration. Investing in businesses where your competitors have a large financial chest may prove detrimental to your business.
Starting a business where there is lower competitiveness is advisable. Here, your difficult-to-copy edge will place your business in the forefront of the pack, as it will attract patronage which sets the business apart from its competition.
The Future of the Business
In selecting a business idea, it is imperative to consider the future of the business. Many businesses function/operate in sectors where sustainability is low. An example of this is the coal mining business.
With a growing awareness of the dangers of global warming caused mainly by carbon fuels, developing a business idea in this direction will not be wise. This is because the use of fossil fuels is increasingly discouraged.
This, therefore, casts a shadow on the sustainability of the business idea.
Thorough understanding of the Business Model
To build a sustainable and thriving business, having a good understanding of the business model is important.
Hence, this criteria/technique is a necessary precondition of selecting a business idea. There are too many businesses that go under (fail) due to this very problem (lack of understanding of the business model).
Understanding is not enough, as it also requires implementable skills. Using this criterion as a yardstick in selecting a business idea guides the business from failing in its infancy.
Target a Large Market
This is one of the criteria and techniques in selecting a business idea. When formulating the business idea, critical thought should be given to the market size and the people/clients the business will serve.
Selecting a business idea with a limited client base will result in a business that does not make a real impact on sales. Business ideas targeting larger markets easily get access to funding/loans.
This is because investors or borrowers see the potential of the business growing into a major player, thereby protecting their investments and interests.
An Easily Scalable Business Idea
Every business idea possesses features of easy scalability. Hence developing a business idea any further, critical questions should be answered on the scalability of the business idea.
Selecting a business idea that does not meet this criterion is risky and unhealthy for the business. A restricted business eliminates the possibility of growth; therefore, the business from the on-set has less likelihood for growth.
Examining Similar Business Ideas and How They Have Fared
When selecting a business Idea, it will do well to search for other similar business ideas that have been developed and examine how these ideas have fared.
What is the success rate? and the cause for the success, or failure of the selected business idea.
This criteria/technique for selecting a business idea ensures that the mistakes done in previous business ideas are not repeated, hence increasing the chances for success. The same also applies to the success of the business idea.
Successes experienced with previous ideas are easily replicated.
A brainstorming session is one criterion for selecting a sound business idea. During the brainstorming session, the entire business idea is scrutinized for any loopholes or areas needing improvements or modifications.
Most of the steps given above are subsumed under brainstorming.
Criteria and techniques in selecting a business idea have been covered in this article, with the basic constituents of the criteria and techniques included.
With the information supplied, the entrepreneur is given reliable tips used in selecting a business idea.
It also exposes the fact that developing a reliable business idea requires much more than having an interest, as other very important criteria are used in the process of selecting a business idea.