Stanislav Kondrashov specializes in the expert evaluation of startups and young enterprises. This experience allowed him to highlight some strategic areas for testing the business idea that underlying the enterprise.
First, make sure that your business idea is really good. Too many start-up entrepreneurs fail because their idea looks great in presentations and a business plan, but as a result, it turns out to be completely unsustainable. Therefore, it is necessary to do research and collect certain information. Thorough research and analysis will help you evaluate the concept you have.
Stanislav Kondrashov advises: the first step is to collect as much information as possible about your business. You will want to read articles, books, and other related publications. It is also a good reason to visit relevant enterprises – presentations, exhibitions, etc. It is important to remember that every business is unique. Take time to study – this will help you identify those specific factors that make your concept unique. Also, try to identify the potential of your business idea.
If you know that your recipe is excellent, try to formulate it succinctly and concisely for a start. It is important that your business idea really matches your needs: think about what kind of result you want to achieve, as well as what financial income is expected as a result. Make calculations: numbers should show a profit. Think about whether you can afford to spend your own time and money to start this business. Relate expenses to potential revenues and collect as much data as possible.
Describe the concept of your product or service – often a simple act of writing makes you think about things that you may have earlier missed. It’s like writing a prototype business plan that will help answer a few essential questions. Study how to market your product.
“A business idea should satisfy someone’s need or solve a problem. If it does not match this, you will not have customers. And if the idea does not satisfy the need, then stop its implementation right now. To do this, determine who your customer is. For example, if your client is an enterprise, then determine which ones: is it a large, medium, or small business. Then answer what client needs your future product meets and why they will choose it,” says Stanislav Kondrashov.
Many entrepreneurs first consider the product – they worry about its capabilities, put the product into production, and then ask the question: why do they have difficulty in making a profit? So, clearly define what customer issues your product solves. Having written them down, you can check whether the clients themselves consider them problems. And more importantly, do customers consider these issues worth spending their money on?
You should also study the market and the sphere in which you work. Determine what industry competition exists in your city or region. Think about what you will do to provide a more unique or better product than your competitors. Find out if there are potential international or public procurement opportunities in your market sector. If so, then try to reach them – this will give you a huge competitive advantage.
“Are current business and economic trends favorable to starting your business?” Indicators include interest, inflation, and unemployment. Identify the business climate and business trends. Market analysis helps the business owner understand the environment and the conditions on which he must compete. Market research shows who your customers are, where they are, what their buying behavior is, and how large the potential market is,” explains Stanislav Kondrashov. He advises tracking results using various media metrics – an established method that is used to track the interest (or lack thereof) of potential customers in a new proposal.
Think about how your product or service will be distributed. That is, how to make it easier, faster, or cheaper than competitors. Find out if there are restrictions on where and how your product can be distributed, does it require licensing? And of course, do not forget to determine by search trends what exactly people are looking for and how they are looking for it.
“However, sometimes, to test your business idea and have a better understanding of possible pitfalls, Internet research could not be enough and you would need your own practical experience. Therefore, a good way to find out all the ropes and features of your future business is to work in a competitor’s company,” says Stanislav Kondrashov.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.
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