Perhaps it was a flash of inspiration or it’s something you’ve been thinking about for a long time. Whatever the origins, your new business idea is a guaranteed success.
Or is it?
Before you roll your sleeves up and get your business off the ground, you first need to test whether your idea is feasible. A structured feasibility check doesn’t have to be hard, but it will highlight major areas you need to consider, including any potential risks.
To succeed in business you first need an idea that is achievable. After that, you’ll also need a clear understanding of what is involved in reaching your goals and how you’re going to get there.
If you have a great idea for a new business but don’t know where to start, this blog is for you. We’ll take you through an 9-step feasibility test to check whether your idea will make enough money to cover your costs and make a profit. (Startup owners may want to read this post, in conjunction with this one, to get extra guidance on how to supercharge an approach to success.)
1. Create a strong unique brand
Your business needs to stand out and a strong brand is integral to this. As part of this you’ll need to check your business name doesn’t conflict with that of another business. To do so, check the free online registers provided by the Intellectual Property Office of New Zealand (IPONZ) and the NZ Companies Office.
2. Have a business plan
A business plan helps you put organise your ideas, clarify goals and ensure you have all of your bases covered. It will also improve your chances of success. Your plan should be an evolving document that grows with your business.
3. Know your unique selling points and capitalise on them.
USPs are things that differentiate your business from its competitors, such as an exclusive product or exceptional service. These USPs provide a solid foundation for your business, giving you a competitive advantage that can be promoted in your marketing and potentially justifying larger profit margins.
4. Budget for ongoing costs
As a business owner, it’s important you have an intimate understanding of the figures. When creating a budget, explore different options for fixed and variable costs and ask other experienced owners for advice. Putting together a detailed, accurate cost budget takes time and money but is hugely valuable.
5. Measure, don’t assume, demand
You’ll need to find out which segments of the market respond respond most positively to what you’re selling. Research their purchasing habits and understand why your offering appeals to them more than others. Once you know this you can target these types of customers.
6. Set yourself apart from the competition
Competitor analysis is essential to business success, so you can set yourself apart from the pack. To do this, you first need to know what your competitors offer and how good they at it. A good starting point is to test what each rival offers, as a paying customer.
7. Work out your profit forecast
The more detailed your financial forecasts are, the more accurate they’ll be. Define target market value, estimate the share your business will take from competitors and work out your pricing accordingly to ensure you find a workable profit margin.
8. Consider up-skilling
A clear understanding of your own strengths and areas for improvement enhances the feasibility of your business. Ask other industry professionals what skills and qualifications they have and assess any areas where you could up-skill.
9. Address compliance to improve feasibility
Understand the compliance standards for your type of business by researching your obligations on Business.govt.nz. You can then contact relevant agencies and industry bodies who can help guide you through the process.
Starting a new business is an exciting venture, but without the right foundation it can be full of potential risks. Before you take the plunge and get your idea off the ground, there are a number of things you can do that will safeguard your investment in the future.
No matter what kind of business you’re considering, you first need to test whether your idea is feasible.
Following our 9-step process will help you look at key areas in detail, so you have the complete picture and a strategy for success.
Would you like to be guided through the 9-step process, by one of our experienced business partners? Have a coffee with one of them today, to assess your business idea.