Monday, October 5, 2009

20 questions to ask yourself before you start a business

I came across this article that has some tremendous suggestions or "questions" to ask yourself before diving into an idea you have for a business.

20 questions to ask before you invest;
#1 what problem does your product or service solve?
#2 how big of a market is there for this problem? This pain and or need?
#3 how are those who have this problem solving it now?
#4 clearly articulates your secret sauce, other words what is your unique selling proposition?
#5 is there replacement products in existence that could solve the problem?
#6 who is the market leader in the space you plan to enter?
#7 how many other competitors are there in this space?
#8 what is your level of understanding of this market?
#9 is your idea a product or IP that can be patented?
#10 what stage is this market in terms of its lifecycle? Infancy, growth, mature..?
#11 what level of support will be required to serve this market? Do you personally have expertise in running a business?
#12 what are the distribution channels of this market?
#13 what is the buying cycle?
#14 what is the common payment terms for this market?
#15 Do the potential buyers of your new product have the ability to pay for it?
#16 is there any legal and or compliance issues this product must pass prior to launch?
#17 what do you estimate is the total costs per unit of sale, transaction
#18 what is the anticipated number of units sold in year one? What % of the market opportunity does this represent?
#19 what is the number of units needed to break even with your upfront investment?
#20 How much cash will you need, based on the buying cycle, the costs, payment terms and distribution channels to launch this product or service?

get inspired by the article here. and see if you can answer them all, the more you know the better off you'll be. Or will save a bunch of dough by not wasting your money in an idea that never looked good on paper...

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