Starting a new business
Putting personal resources on the line for the sake of a business startup is a scary prospect for many entrepreneurs. In fact, these fears are one of the main things that prevent new small businesses from developing. It is too easy to be overwhelmed the notion that failure will result in personal financial ruin. The best way to put your mind at ease is to conduct a feasibility analysis. This will allow you to evaluate your probabilities and risk.
Business startup feasibility study
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.
To begin a feasibility analysis, you must first take the time develop what your business will be and why you want to do it.
- Write down things that make you think the work will be worth it.
- Develop a checklist and write down all of the characteristics that you think will be necessary for your business to succeed.
- Take the time to do some self examination and honestly consider whether or not you have the skills and characteristics necessary to be better than the competition.
The most important thing to keep in mind as you ask yourself these tough questions is that you must be honest with yourself. Do you really have any leadership skills? Can you define them? What is your vision? What kind of personal sacrifices are you willing to make so that the business will thrive?
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).
At this point you have completed the research phase of your analysis. You will now use the information that you have gathered to make some decisions and to work your way through some theoretical exercises. Don’t put aside that information that you have just gathered concerning yourself, you will need to incorporate it into the rest of the study.