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Do you want to evaluate a business idea?
If you have an online business idea, the first thing you’re going to want to do is to discover if it’s a profitable idea. You’ll want to know if people want to buy your thing and how many are likely to buy it. That’s why you have to evaluate your business idea quickly before you take the plunge.
How Do You Evaluate a Business Idea?
There are several ways you can evaluate if a business idea is worth going after, but the quickest way is by using the tried and tested business tool of a SWOT analysis.
Using a SWOT analysis to discover if your online business idea is viable or not is a great way to assess your idea quickly.
So what is a SWOT Analysis? Well it’s simply involves assessing these factors:
- Strengths
- Weaknesses
- Opportunities
- Threats
A SWOT analysis is valuable in evaluating every part of your business from a product, service, and the business idea itself.
How do You Identify a Good Business Idea?
Strengths
By evaluating the strength of your business idea itself, and your personal strengths it gives you the ability to move that idea forward much more quickly.
By looking through a microscope into what is working out in the current market, if there is a trend you’re building your idea on or if there are other businesses already doing something similar to your idea you can build on what is already working and progress faster with your idea.
By taking a proven formula that already works, you increase your success two-fold. You can also pinpoint specific areas of success in order to grow your own business idea faster.
You’re own skills and knowledge is also a key strength for any new business idea you have.
Weaknesses
The whole point in evaluating weaknesses for your online business idea is to eliminate or at the very least minimize them. Weaknesses are in every aspect of business and if unaddressed, those weaknesses can fester and grow.
Eliminating or minimizing those weaknesses will keep them from reducing your success with your new business.
Internal & External Factors
There are two major categories of measurement – internal factors, which are within the organization. So as a new business this would be about your skills, knowledge and resources.
And external factors, which are outside the organization. This would be your competitors and any factors from the world at large.
Both strength and weakness belong to internal factors. However when evaluating a new business idea some of the aspects you will have to evaluate will be external such as market trends and competitors.
Opportunities
Evaluating opportunities is useful in learning about how those opportunities will be useful for you to gain momentum with your online business. Taking advantage of any existing opportunities and trends, to use them to increase the success of your business idea.
Opportunities can be used to help better position yourself in a highly competitive market if you spot a gap in the market you can fill or help with the types of products and services you decide to create in your new business.
Threats
Evaluating threats in the environment is crucial to the success of your online business idea. This will help you protect or prepare your new business for any of those threats to ensure they don’t stop you in your tracks from accomplishing your business dreams.
All businesses will have some threats, especially in this highly competitive online space, however knowing what they are is the best way to ensure business success in the long run.
Opportunities and threats belong to the external factors category.
What Makes a Great Business Idea?
So how to evaluate a business idea to know it’s a great business idea?
Evaluate your online business idea for its strengths by highlighting the areas you feel are your strongest. You can start by listing all your key skills and knowledge around your business idea.
If you’ve done any testing of your product or service or have a website with a comments section, list the positive feedback received. This could even be the feedback about your idea in Facebook groups. Check out Google trends to see if you’re entering a growing market.
Evaluate your online business idea for its weaknesses by looking at negative comments on other websites in your niche, looking at any negative reviews on books about your niche on Amazon. Also, ask for the opinions of others.
Seek out new and innovative opportunities based on existing ideas that you can expand. Search out opportunities within other businesses to grow and expand your own. Look at the trends in your niche that are growing.
Be wary and aware of external elements that could potentially damage or ruin your business or service. Check out industry and business blogs to see if there are anything you need to know.
How do I Choose a Business Idea?
By using a SWOT analysis, you’ll be able to quickly evaluate a business idea. You can take 2 -3 ideas and work through this process.
You then want to choose the business idea that has the most strengths and opportunities and the least amount of weaknesses and threats.
It that simple. So what business ideas will you be evaluating?
If you’re looking to get started with any of these steps, check out the Build Your Business Vault – where you’ll find templates, worksheets and checklists that will help you get started!
