Selecting an Idea!!
- 1. Is your innovative idea a good one?
- 2. Analyse the innovative idea
- 3. Market analysis
- 4. Competitive advantage analysis
- 5. Financial feasibility analysis
- - Assessing the market size
- - Assessing the competitive advantage of your idea
- - Abtaining independent endorsement of the idea
- - Assessing capital requirements
- - Considering your management ability
- - Finding out if anyone else has tried your innovative idea, and if they failed - why?
Market analysis: Once you have determined there is a market for the product or service you are planning to supply, you need to conduct some more research which should include the following: - Demand analysis: Here you determine the type of demand that exists for your product or service (eg: consumer, distributor), and establish the size of the market and its growth capacity. - Supply analysis: Look at the life cycle of the industry. Is it the right time for you to be entering it? Also study the way the industry is structured and think about how that will affect your business. - Relationship analysis: How do the various groups within the industry interact? What is the bargaining power of buyers and suppliers? Is there a threat of substitute products or new entrants? Competitive advantage analysis: Now that you've established that your idea is a good one and that there is a market for what you are offering, you need to determine what makes your product or service special. Ask yourself these questions: -> How is my product or service different to those offered by my competitors? -> Why will customers purchase the product or service from me rather than my competitors? -> Are there any barriers to me entering the market? -> What makes my competitors successful? Financial feasibility analysis: The final part of your study should address the financial feasibility of the business idea which involves the following: -> Preparing a sales forecast; -> Estimating start-up and working capital requirements; -> Estimating profitability; and -> Assessing financial viability.