Having a great business idea/model is a job worth appreciable. But it is important to check whether your business model is viable or not. Here are few of the factors that you should look for getting an idea on this.
1) Uniqueness -
It is really encouraging to see your extraordinary energy, passion and commitment that you have taken the initiative to start a company. Your primary focus should be to have an idea which is unique. What makes you different from the rest. Uniqueness does not only mean of inventing something new, it just means that you have to set yourself different from your competition.
For Example - If you want to start an event management company then what is an extra service that you will provide to your customers which is not been provided by your competitors. The most successful business must have a unique concept and a real identity. Take your Time and Think Yours.
2) Product -
You have to make sure whether your product (whatever it is goods/service) is satisfying the needs of the people (without introducing new problems) or not.
i) You have to check your product is sustainable in the market and will continue in the market in the long run.
ii) You have to make sure that there is a sustainable differentiation in your product. The differentiation needs to be strong enough to beat major potential competitors.
iii) You have to make sure there is no barriers for your product in entering the market.
3) Business Model -
You have to think what should be your business model. The model should be viable in the market. As most of the startups fail because the cost of selling the product stands higher than the revenue after sale of the product. One of the major factor of deciding a business model is determining a cost effective way to sell the product. It is very important to make a balanced business model. The business model should be attractive in the long run as well. Generally, Entrepreneurs become too optimistic about how easily they will acquire customers by building interesting website, product or service. They think these things will lead to customers beating a path to their doors. It may happen for the first few customers but gradually it becomes an expensive (both timely and financially) to attract and win customers.
So, you should make a model in which you will be able to acquire your customers for less money than they will help you in generating value of the lifetime of your relationship with them.
4) Upstart Funds -
Determining your startup costs is another important factor to look for. Every business has some expense in the starting days, whether it is for equipment arrangements, rent for building or expense of just basic marketing materials. You have to make a realistic estimation. You need this to obtain a loan if it is a huge amount or you have to make a budget if you are paying the expense out of your pocket. For taking loan you have to consider many factors as -
- What is the rate of interest.
- How much Interest Rate will cost you in long term.
- How much is the equity you need to give up to get the finance.
- Any personal guarantee is required or not to be signed.
Also if you are an entrepreneur of India, you can have finance under various schemes for Upstart Funds given by Government of India as India is considered as the third largest start-up base in the world.
5) Customer - You need to make sure who is your customer. For success of your business it is vital to know who will be buying your products or services. Defining your customers is important even you have to be broad at first. If your business is of renting a space, you have to make sure that the local demographic fits this profile. You can also attract customers by building an effective digital presence. Every Businessman knows Internet is a powerful tool when it comes to bringing consumers and business together. Putting expense and efforts to build an effective digital presence which includes e - commerce site and engaging social media channels can be excellent way of bringing your business to next level.
6) Market -
Market Validation is an important step in checking your business idea validation. Market Validation is a process of determining the interest of your product in a given market. It involves a series of steps which includes customer interviews of people in your target market and getting their market feedbacks. By simply engaging with the real people and asking them right questions, you can confirm your idea or modify it if it has any problem. You can also get to know your potential buyers and finally you can know whether the market is suitable for your product or not. There are different customer interview tools to look for. Writing your product concept. Product concept as in few key questions that you can go out and test. These will be considered as your assumptions and then you can test them in your target market. Make sure you complete your market validation process before you have made a significant investment in your project.
7) Competition -
It is very rare that your business would not have competitors in the market. Study about your competitors in detail. Every Entrepreneurs must know about their competitors as the customers will surely check them in future. Competitors can be used as your great resource as a startup. You can see how much they are charging, what are their marketing strategies and what is the location they are choosing. Use your uniqueness in going one step forward from the competitors.
8) Economic Mood -
Your success of business is largely dependent on the economic mood. Study the state of economy and think how it can relate to your start up like where consumers mind is at that point of time. Even an economy breakdown can be an opportunity for you if you meet the mood of the consumers. If your business idea does not fit in the current economic scenario, then find out ways and modify your business plan to fit into today's needs.
9) Timing -
For a startup, timing is very crucial. If your product is seasonal, then timing of opening your business is the most important factor.
For Example - Opening a woolen clothes in the month of April is a bad idea. Timing of opening your business should be directly proportional to consumer demands. If you start your business when demand is at its peak you will be flooded with new customers and customers who will come back for more.
10) Management Team -
If you want to run your business efficiently and effectively, you need a strong management team. Management team helps in getting works done in a proper manner in a given period of time. A great management team plays a huge role in increasing the chances of your success. A good management team also attracts investors. As along with your business idea, investors see your management skills. If you have a skilled management team, you will be a step ahead from others in getting investments.
Entrepreneurship is like riding a tiger. You cannot stop once you start. If you stop you die, if you feed it properly becomes cheetah or royal Bengal tiger.
Good Luck. Stay Focused.
If you want to expand your business or looking for mentoring and investment support please be in touch.