Business Series: Will This Idea really work? (Feasibility Analysis)
6:00 AM
So you have a great idea, you've identified your strong points, you want your dreams to become a reality and not just hallucinations. So your next step is to see whether your idea can really work.
This is where you do a feasibility study. A feasibility study is exactly what it says. You want to know that your idea can and will work. You also want to do this at the early stages to avoid spending too many of your resources or wasting them.
So How do you go about this?
- First describe what your business is. What you are offering and how you will deliver
- Describe your market. That is who you are going to sell to (target market). Here you have to be very specific about your target market. If possible create an Avatar. That exact person and story of who your ideal customer is. (more to come in a future post) How big or small is the market and what competition is currently serving that market
- look at the Habits around your product. Is it seasonal? Is it bought as a gift or can it be a household staple?
- Figure out the details on how you will deliver your product e.g. Where will you source your material or labor. How will you ship, where exactly will your business be located and what kind of technology will you need?
- How much will it take to start all of this, how much money do I need to start, what will my start-up costs be. When will I start to make a profit?
In essence, the feasibility analysis is broken into four groups:
- Product or Service Feasibility – Do people really want your product or service
- Market Feasibility – Is this the right time for the products and is there a niche market for it
- Organization feasibility – Does the business have the right skills and resources to pull this off
- Financial feasibility – How much money you need to start, what are those starts up costs
This sounds like a lot of detail especially when you are a one-man team running everything, but it is important because you don't want to find yourself in a situation where you are spending all this money trying to make and sell your product and you are getting nothing in return. Or you are not getting enough to cover what you are spending. Let's not forget the amount of time you are putting into everything. You want to get into business to make money and not spend it.
In the next part of the series, I will be covering zoning in on your target market, Identifying them and why just doing what everyone is doing is not the best business strategy.
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