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How to Evaluate a How to Evaluate a Business Idea!Business Idea!

Choosing a Business: Learn How Choosing a Business: Learn How to Evaluate Your Business Ideasto Evaluate Your Business Ideas

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Starting a Business Starting a Business

Starting a business is easy! Starting a business is easy! Deciding on what business to engage in is Deciding on what business to engage in is

the difficult part.the difficult part.There are hundreds of ideas you might There are hundreds of ideas you might

think of that could bring in income.think of that could bring in income.How do you know which of these business How do you know which of these business

ideas will bring you success? ideas will bring you success?

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What is needed to be successful?What is needed to be successful?

Hard workHard workPositive attitudePositive attitudeOffer a quality product or serviceOffer a quality product or serviceUtilize strong marketing and management Utilize strong marketing and management

skillsskillsDetermine if your business idea is strong Determine if your business idea is strong

and validand valid

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Criteria to Evaluate a Criteria to Evaluate a Business IdeaBusiness Idea

Ask yourself the following questions Ask yourself the following questions when evaluating an idea for a when evaluating an idea for a business venture:business venture:

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1) Does it satisfy a market need?1) Does it satisfy a market need?

Conduct Market Research!Conduct Market Research!Find a Need and Fill It!Find a Need and Fill It!Do Not Offer a Product or Service that is Do Not Offer a Product or Service that is

so new or unusual, people will not so new or unusual, people will not understand why to buy it!understand why to buy it!

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2) Will the product maintain 2) Will the product maintain appeal?appeal?

Beware of Fads and fleeting trends!Beware of Fads and fleeting trends! If your product is a fad, move quickly to If your product is a fad, move quickly to

make sure you can capitalize on it before it make sure you can capitalize on it before it dies!dies!

Is your product or service appealing Is your product or service appealing nationally or just meeting the needs of nationally or just meeting the needs of your local geographic area?your local geographic area?

Check out the competitionCheck out the competition

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3) How unique is your product?3) How unique is your product?

The goal is to differentiate your product The goal is to differentiate your product from the competitionfrom the competition

Show how your product is unique, different Show how your product is unique, different or superior to the competitionor superior to the competition

Potential customers must find MORE Potential customers must find MORE value from your product to capture the value from your product to capture the market sharemarket share

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4) How useful is your product?4) How useful is your product?

Many new ideas and products are Many new ideas and products are successful because their creators successful because their creators identified an unmet need in the market.identified an unmet need in the market.

How will your product be used?How will your product be used?How often will your product be used?How often will your product be used?Some businesses help create a need Some businesses help create a need

(desire?) through promotional advertising (desire?) through promotional advertising and promotions.and promotions.

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5) How much competition exists?5) How much competition exists?

You will always have competition!You will always have competition! Determine the kind of competition you will have Determine the kind of competition you will have

locally, regionally and nationally.locally, regionally and nationally. Look for heavy or moderate competition (the fact Look for heavy or moderate competition (the fact

that competition exists proves there is a demand that competition exists proves there is a demand or at least a need for the product or service you or at least a need for the product or service you have to offer).have to offer).

Test for market saturation!Test for market saturation! Lack of competition could mean that your idea is Lack of competition could mean that your idea is

not profitable to begin with.not profitable to begin with.

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6) Have you priced your product 6) Have you priced your product competitively?competitively?

The right price for a product or service is one of The right price for a product or service is one of the essential elements in a solid business the essential elements in a solid business model!model!

The wrong price tag is a ticket for disaster The wrong price tag is a ticket for disaster (economic survival is a primary consideration)(economic survival is a primary consideration)

Your price should meet three requirements: It Your price should meet three requirements: It should match the competition; It should be should match the competition; It should be attractive to customers; It should earn you a attractive to customers; It should earn you a profitprofit

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7) What is the level of difficulty in 7) What is the level of difficulty in the creation or implementation of the creation or implementation of

the product? the product?

You need to consider time, capital investment You need to consider time, capital investment needed, marketing costs, & personnel needed.needed, marketing costs, & personnel needed.

Do you have the engineering, production, sales, Do you have the engineering, production, sales, and distribution facilities needed?and distribution facilities needed?

You may have an excellent business idea, but You may have an excellent business idea, but you also need to consider the economics you also need to consider the economics needed to produce it!needed to produce it!

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8) What are the growth 8) What are the growth possibilities?possibilities?

Can the demand for your products or Can the demand for your products or services be expected to grow or change services be expected to grow or change with the economy?with the economy?

Can your product or service survive a Can your product or service survive a major technological surge or major technological surge or obsolescence?obsolescence?

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9) Can I get backend sales?9) Can I get backend sales?

Back-end sales are all the products or Back-end sales are all the products or services you sell and resell to customers services you sell and resell to customers or clients after they have made their initial or clients after they have made their initial purchase.purchase.

Will your product or service warrant repeat Will your product or service warrant repeat sales?sales?

There is real value in building a pool of There is real value in building a pool of repeat customers.repeat customers.

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10) Is the product safe?10) Is the product safe?

Safety is an important consideration for Safety is an important consideration for many customers!many customers!

You need to be sure that your personnel You need to be sure that your personnel are properly trained to satisfy customers.are properly trained to satisfy customers.

Educate your customers on how to best Educate your customers on how to best use the product & include clear use the product & include clear instructions!instructions!

Be sure your business is insured against Be sure your business is insured against various forms of liabilities.various forms of liabilities.

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11) Can my product be promoted 11) Can my product be promoted with strong advertising?with strong advertising?

Emotion sells! People are motivated to buy Emotion sells! People are motivated to buy because of emotions: greed, fear, want because of emotions: greed, fear, want etc.etc.

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12) Will you be left with Inventory?12) Will you be left with Inventory?

Avoid inventory risk! Would you buy this Avoid inventory risk! Would you buy this product or service?product or service?

Insure inventory against disasters- fire, Insure inventory against disasters- fire, tornado, hurricane, etc.tornado, hurricane, etc.