8 Questions To Ask Yourself To Be Sure Your Business Idea Will Make Money For You
It is true that all great wealth come from ideas. Just a simple business idea can make you so much money above your imagination. But the question is â€œdo all business ideas make money?â€ Of course not! Some business ideas can even cause you to lose money instead of making it. Therefore, to avoid losing your hard earned money to a failed business idea, it is always good to research the idea thoroughly before investing in it.
Here are 8 questions to ask yourself to be sure your business idea will make money for you or not:
1. Do you have the expertise and experience for the business? This, I believe should be the first question to ask yourself about your business idea. Your knowledge of the business and experience can go a long way in defining whether you will make money from the business idea or lose money. Armed with good know-how of the business, you will be able to avoid making wrong decisions that could cause you lots of money, and make the ones that will make you the money you desire.
If you donâ€™t have the expertise or experience yet, I advise you keep the business idea for now and go for the expertise first â€“ it always pays off this way â€“ you will certainly be able to make tons of money from the idea when eventually you launch the business.
Getting the needed expertise or experience can be by formal training, such as taking a course, enrolling in an apprenticeship program and learning on the job.
2. What is your market size? For a business idea to be profitable it means there should be a good number of people who would bring out their money to buy what you are offering. The more the number of people who need your product or service, the more money you stand to make. This is why business ideas that have to do with mass product or service always make huge money for their owners. For example, if your business idea is targeting a group of people, say 10 million in population, and you make a profit of 1 dollar each selling to 1 million of them, thatâ€™s $1million you have made â€“ you are a millionaire already!
3. What is the frequency of repeat purchase? This question, which you have to subject your business idea to, to see if it would make money for you is asking, if someone buys your product or service, when next are they going to buy another? The shorter the time they use up your product or service to need another, the more money you will make. You may not have to worry so much about increasing your customer base since the ones you already have are making frequent purchases.
4. Does the business idea provide opportunity for expansion? If the business idea does not allow for expansion, it may make some money on the short run, but such earnings may not be sustainable. For instance, if the idea is to provide a product or service only for a certain group of people in a certain location, that means the money you can possibly make is limited to that particular group of people. The coming of competitors into that market will definitely decrease your earnings, and eventually cause the business idea to be unprofitable on the long run.
But if itâ€™s a business idea that people of different races and cultures, far and wide, can use its products or services, then you are on your way to enormous money. You can easily expand to access more profitable markets elsewhere â€“ you are on your way to being a multinational business.
5. What is the level of competition in the industry? Industries with tough competition are difficult terrains for a new business idea to make money. This is because the new business owner may not have the resources, both financial and human, to compete favorably with businesses that are already there.
6. Does the business idea compete head-long with the industry leaders? This question natural follows the one immediately above it. If you really desire to make money with a business idea, a sound advice to heed is, never try competing with industry leaders head-to-head. These are businesses with strong brand names, enormous financial strength and expertise. They may get angry with your presence and decide to bury your business idea with a massive promotional campaign!
The best way to get into an industry and be sure of making money is for your business idea to identify a profitable niche to dominate, instead of trying to pull the carpet off the feet of the giants in the industry.
7. Is the business idea easy and simple to execute? Your business idea should be simple and easy to execute for you to make money. It will be of little or no use to have a business idea that requires 3, 5 years to be ready for launch. In these days of high degree of technological changes and innovations, your business idea may be rendered irrelevant if you take too long to bring it out. You will be shocked to see that just as you are thinking of a business idea that can make you good money, thousands of people too are thinking in that direction.
8. Is the business idea flexible? Can it be easily adjusted? Again, I have to say that in this age when things, including consumer behavior, change so frequently, a business idea that is rigid in structure and operation may find it hard to make money. Without the ability to easily and quickly adjust to change, such businesses may not even last long because all what their smarter competitors need to do to clear up all the money to be made in the industry is to continue to innovate.
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