Planning Your New Business: Feasibility Analysis Part One
The first concern for many would-be business owners is a creeping fear that whatever business they start, it will end up failing miserably and leave the company's founder with a lot less than what they started with. Given that few small business owners can call upon massive resources, this is an understandably frightening prospect. However, there is a way, called feasibility analysis, to gauge your chances of success.
The first and most important rule of the feasibility analysis is to be honest with yourself. If you're not sure of something, find the truth of the matter, and don't forget to question assumptions. The second, equally important rule is to assume the worst when you're dealing with uncertain factors. These two rules can not be stressed enough.
There are two basic steps that need to be completed in beginning a feasibility analysis. The idea that you originally had for a business in the first place needs to be fleshed out and defined. As you expand this idea, you will naturally be lead to ask a series of questions about the business itself.
Ask yourself questions about your long term goals and past experiences which may help or hinder you. Use these questions to form a checklist that you can use to honestly assess yourself and your capabilities, skills, desire, and commitment.
The second step is research. You'll want to research as many aspects of your potential start up as you can reasonably manage beforehand. Still, there are a few fields of particular importance for any business owner.
The first is researching the demand for your business at the time and place you're planning to found it. A low demand is not necessarily something that should stop you entirely (unless you're trying to sell something with so little demand that it's obvious you can't form a business), and you will want to consider the low demand for the future.
You'll also want to research the competition in your start-up's industry, as well as research ways that you can do better than your competitors. You'll also want to look into other factors that make an impact on the general setting your business will be in (called the business environment), such as distribution matters (for retail-based businesses), supplier issues, and other effects that might help or harm your business. Finally, you'll want to get a clear picture of your industry's demographics (statistics showing you who your potential customers are).
Congratulations - you've reached the end of the pure research phase of your feasibility analysis. From here on out though, you'll be combining both research and theoretical decision-making to get you through the final three steps of the analysis. In the meantime, gather what you learned and prepare to put it to use.
John Edmond worked for many years in insurance and finance and now writes on a number of topics including new business planss and internet" target="_blank">www.on-internet.info">internet marketing
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