The process described below is simple but very important, as it will help you determine whether a business idea is suitable or not so you can choose your best option. Many current business owners have told me what a useful tool this is. They say that, without it, they would have started out randomly, leaving virtually everything to chance. You don’t have to do it right now, but when the time is right and you feel like you’re ready, it will come in very handy. For now, just take a look.
- Write down all of the business ideas you have in mind or that are appealing to you.
- Score every idea on a scale from zero to three in each of the categories below.
0 = not at all; 1 = a little; 2 = quite a bit; 3 = very much
- Add up the total number of points. It’s not recommended to go into any business that scores fewer than 10 points.
This way, you can evaluate and narrow down your business ideas to increase your chances of success.
- Knowledge of the business: Do you know much about this type of business? Would you be able to start it by yourself or would you need a partner who knows more about it than you do?
- Experience in the business: Do you have experience in this type of business? You may know a lot about a certain type of business but not have much real-life experience operating it. For example, you might be an excellent restaurant manager but not know anything about cooking.
- Your skills: How qualified are you to run this type of business? This refers to the skills that are directly required by the business, for example, cutting fabric, driving a truck, cooking, designing, etc.
- Ease of getting started: How prepared are you to confront the costs and barriers associated with entering this type of industry? For example, at first glance, it might seem easy to open a bar, but upon further examination, you’ll find that it takes a lot of money and that it’s very difficult to get a liquor license.
- Competitive advantage: How much will you be able to differentiate your business from that of your competitors? In other words, how will your business be unique and better? This refers to whatever special qualities you can bring to the table.
As always, we wish you great success with your business. Remember that owning is business is the real American dream!