So, you think you have a great idea for a business? You feel confident that “if you build it, they will come”. You invest a bunch of money to start your business and then you’re shocked when it doesn’t work. But it’s such a great idea right?
Before you launch a business DO YOUR DUE DILIGENCE. Make sure you can answer these important questions before you spend a bunch of money starting a business.
The Competitive Marketplace
What is the overall size of the current market, in terms of sales volume, that you plan to compete in?
What are all the required startup costs for your business? (infrastructure, monthly operating expenses and marketing expenses)
What percentage of share of the current market that you will be competing in do you realistically expect to achieve in years one through five?
Your Target Customer
Who is your target consumer?
What does your target consumer value most in terms of your products and services?
How much is your target consumer willing to pay for your products and services?
How Do You Measure Success
What metrics (mostly financial, but also physical and emotional) are you personally (sole proprietorship) or is the organization (company leaders, investors, etc.) willing to set in order to define success or failure?
Based on the percentage of market share that you anticipate capturing, and the revenue it translates to, what is the time frame for when you break even (recoup your startup costs) and for when you become profitable?
If you fail, what is your exit strategy?
It takes so much more than just a great idea to determine if you have a truly viable idea for a business that can be successful – and the above questions are just a fraction of all the questions you should be asking yourself before you go to market. CMOco works with entrepreneurs and venture capital companies to help them determine if their business idea is worth the millions they think it is. Call us to learn more.