April 19, 2024

Business Bib

Business & Finance Blog

How To Evaluate Your Inspired Business Idea

3 min read

What do you do with a flash of insight? If you’re like most people, you procrastinate, overwhelmed by the idea of building a business around it. On the other hand, perhaps you’ve spent hours, days, weeks, months, or even years searching for a perfect business idea, a product or service that fulfills an unmet need in the marketplace.  Maybe you stumbled upon an idea by accident. Frustrated by a product or service that did not deliver real value, you found an alternative solution. Regardless of the genesis of your inspiration, you now have to decide what to do about it. 

Should you set it aside as a wishful dream, only to discover later that someone else also had the same idea, acted on it, and made a fortune? Or should you throw caution aside, quit your day job, launch your own business, and see what happens?

Fortunately, there’s a third option. Think more deeply about your business idea by reflecting on your vision, evaluating your concept, identifying your market, differentiating your product or service, and conducting a financial analysis. 

Reflect on Your Vision

The best way to define visionary thinking is to look at a real-life example: 

Jim Plante, the Founder, Chairman of the Board, and CEO of Pathway Genomics Corporation, began his business career after he learned his father had Polycystic Kidney Disease (PKD). This genetic disorder appears 50% of the time in people over 50 years of age. 

Plante became a business leader in biotechnology because a vision of finding solutions to genetic diseases that appeared in the elderly inspired him.

So, start with your vision. If you have a strong enough “why,” you’ll overcome any “how” that gets in your way.

Evaluate Your Idea

Ask the right questions to determine the feasibility of your business idea. Think deeply about your idea. See it from different angles. Discuss it with people who could give you sound advice. 

Although you might feel enthusiastic about your idea, subject it to the cold light of scrutiny. If it’s as good as you think, then it will survive close examination. If it’s a dud, you’ll have saved yourself time, money, and heartache. to read business news regularly to get more ideas which will help you evaluate better

Conduct a Financial Analysis 

Assuming you’ve thought about your idea for some time, reviewing the market, identifying your ideal customer, and differentiating your product or service from what’s available in the marketplace, you now have to figure out the financial aspects of your big idea. 

Here are five questions to ask:

  1. How much will it cost to launch your business?
  2. Where will you get the capital to start and run your business? 
  3. How much can you earn from sales?
  4. How long will it take for your business to be profitable?
  5. When can you pay back your loans?

Will It Fly?

While you won’t be able to get absolute clarity, thinking deeply about your business idea will help you decide whether you should move ahead with it. 

Besides pondering on the idea, you can talk to business advisors and use management thinking tools, like a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats).