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Tuesday, September 1, 2015

Study Your Business Viability – part 2

Study Your Business Viability

As mentioned in part 1 before starting a business, it is a good plan to carry out both Primary and Secondary research. Then you should check out competition and assess your potential consumer base. This should give you a fair idea of the viability of your business.

So, your recommended plan report should cover the following points to understand the market potential;-

·      Context/Background: This is a review of the recent history of the market; how it has developed into its current size and shape. It will also consider the market in the context of factors such as the economy, social and cultural changes, globalization, and technology, and consider how these factors are affecting the market.

·      Detailed Market Data: This section will look at hard numbers. It will use whatever data is available.

·      Competitor Information: Players, products, profiles, competitive analysis and other information on the market.

·     Trend Analysis: This indicates the health of the market and opportunities for future growth. It should cover emerging markets, and new forms of competition.

From the above points you can identify the size of the market and its possible growth to determine the viability of opening up a business in the specified sector.

So from your own or commissioned market research, you should be able to consider the following types of questions.

Assume your intended business is selling (product x):-

    - How many people buy (product x)?
- What is the market value?
- What is your cost price?
- What is the likely gross profit you could make selling (product x)?
- How many (product x) must you sell to run a successful business
- Is this a realistic number for your business model?
- Is the market already saturated or near saturation?
    - Finally, Can you enhance your business model-for example can you offer other products, services, sell online, open other outlets, etc…?
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