Once you've decided that you have the right stuff to be an entrepreneur, you're ready to determine if your business idea has the right stuff. Before you pump your life savings into a small business, you want to know if it has a chance to succeed.
Here's a look at the prime considerations for determining if your business idea has a chance to succeed:
- Market assessment— is there a market for your product or service? If so, how much income can you expect to derive from it?
- Profitability assessment— how much will starting a new business cost you? Can you afford a lengthy "red ink" period following startup, as well as periodic lulls in cash flow? Can you afford to fail?
- Financing assessment— will you be able to obtain the necessary financing for your business? If so, from where?
- Legal assessment— what potential legal liabilities are you exposing yourself to by starting a new business? Are the costs of protecting yourself worth the trouble?
- Researching your industry— how can you learn more about your chosen industry and about the resources that are available to help you?