4 Steps to Follow Before Launching Your New Business

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!