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4 Steps to Follow Before Launching Your New Business

12/16/2014

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Step 1. Identify your Core Competency: 
A core competency is the special skill, technology, process, knowledge, expertise, or ability that is unique to your new business and could be done better than your competitors.  Some examples are:
  • Valuable – a large revenue generator
  • Rare – not easily found in other businesses
  • Non-substitutable – it’s cannot be replaced by any of your other capabilities.
  • Costly to imitate – it will be expensive for your competitors to try to duplicate

Step 2. Test the Concept

Develop a proto-type of the product or service and bring to prospective customers so you can gauge customer interest, desirability, and purchase intent.  Try it with at least a few dozen people and get their feedback.

Step 3. Study the Market

Obtain information about the current market by researching trends and analyzing the competition.
  • What is the estimated size of the market for your product/service?
  • What is your projected market share?
  • Is the current market attractive for your product/service?
  • Are there any predictions for future trends?
  • Based on research refine your target market

Step 4. Conduct Feasibility Analysis

You have a good concept with a target market, but can you serve your customers profitably?  Can you do it alone or with a team?  What resources do you need?
  • Evaluate non-financial resources – is there a sufficient labor pool (quality and quantity), availability of office space, protection for property, patents, etc.?
  • Prepare a Financial Feasibility Analysis: evaluate start-up and other capital requirements, your projected rate of return, and the overall attractiveness of the investment.
    1. Estimate Sales on monthly and/or annual basis – Do not count on promises; be conservative; estimate sales using different methods and compare figures (both in units and dollars).
    2. Estimate Costs – Identify both fixed costs and variable costs.
    3. Estimate Break-even Point and Profitability

If the business opportunity:
  • Has a core competency
  • Passes the concept test
  • Has a market that demands it
  • Is financially viable

Then, it is time for you to move forward!


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