Feasibility of Business Ideas is a very important module that needs to be understood in order to attract, funding either equity or loans, as well as attract investors into your business. A lot of startups nowadays close down between the first year of launch. One of the reasons for this is the lack of verifying if their business is feasible or otherwise.
The first question you should ask yourself is, is your business idea feasible? Not all business ideas are feasible. In fact, 50% of applications received by investors are deemed not feasible. In this post we will dis you how to validate your business idea and judge if it is feasible or not.
While considering how to make your business or idea feasible, and attract funding from individuals, banks, investors, friends and family, we will discuss this in 5 sub-topics, which are as follows
- Firstly we would talk about your Products
- Then we would delve into the industry your product is serving
- We would also talk about your target audience and early adopters
- then we would carry out a feasibility study of businesses
- Finally we would answer a very important question, which is “Why You?”
We’ll wrap up with a brief overview of the popular Strength Weakness Opportunity and Threat (SWOT) analysis and why it is important for your business/idea.
Once we have covered these, IT would be apparent if the business or idea is feasible or otherwise.
Firstly, it is important you that there’s no bad idea for a business, usually, there are only bad strategies, timing, location of execution of that business.
Whatever your idea is, the question you must ask is this;
What is my product?
What am I selling exactly? What value am I providing? What do I expect my (future/current) customers to pay for?
This applies for both service-based business and product-based business.
According to Scalar academy,
“Product-based companies are the ones that are focused on producing or introducing products that have a high market value and are capable enough to satisfy the customer. The important aspect of these companies is to produce top-quality products. These companies constantly improve the products with new features and upgrades using different and new technologies that are at their disposal.”
“Service-Based Companies are the ones that give customers or clients a solution in the form of amenities (any desirable feature), skills, and/or expertise based on their needs. The important aspect of this type of company is the client. They do not prepare anything specific before the problem arises at the client’s end. Their sole aim is to ensure that the service provided to the client is of the best quality.”
As an entertainment entrepreneur that runs a karaoke company, what that means is that products are sold and services are rendered to customers. A business can be both product based and service based.
Whatever your idea is, you must clearly define what products you have and the services you provide. If you can explain what products/services you render in lay man terms, then you need to check again if you really are in business.
To make progress with your idea, you must be ready to put in a lot of time with research, and this will lead to my second and third points
What industry is your idea it in?
Is it fashion? FMCG? Media? Medicine? Tech? Edutech? Agriculture? Education?
How large is that industry in the global market? In your state and your city?
For instance, the karaoke industry worldwide is worth anywhere from $20 billion.
These numbers will help you make the right decisions at all times.
How large is the audience for your proposed idea/business?
What demography will you be selling to?
All of these must be clear to you before you start your business, and if you’ve started and they are not clearly stated yet, its never too late
The penultimate point – feasibility study
before this, I’ll give a brief background. I was speaking with the CEO of one of the largest supermarket chains yesterday and I asked why they hadn’t opened a branch in a part of the city yet.
I know there had been plans to open the outlet about 3 year ago but nothing yet, so had to ask.
Her response was simple, “the board didn’t like the traffic analysis of that area, however, with the new road that was constructed, we’ll rerun the analysis and see if it improves”
A lot of times, we entrepreneurs get quite emotional about our ideas and businesses once they find their way into our minds and its usually difficult to turn us from the direction we choose, however, you must never make any business decision without the attending research
So, figure out the specific feasibility studies attached to your business/idea or industry, run it or pay a qualified personnel to run. only make your decision after. And if you think it’ll be expensive, I can guarantee that it’s way cheaper than failing after 3 years of running that business.
- what do you want to do differently?
- What are you doing different?
- Why should I patronize you and not your competitor?
- What makes you special?
- Do you have numbers to support your claims?
In another module we would discuss about the Strength Weakness Opportunity and Treat (SWOT) analysis. I’ll also provide some answers and directions to some of the questions I in the post on SWOT using business ideas from you kind folks.
There’s a value gap that companies like SLOT, Phone ARENA and other major phone outlets saw and are filling which is setting them apart from the other shops
One of those gaps is seamless warrantee claim settlement. Another is providing a conducive shopping experience
So the fact that you want to join the community is great, the question you want to ask is do you want to be just another “shop” or do you want to start growing a global brand?
The ability to find funding is also a prerequisite for being a successful startup.