A few years ago, I read an interesting article by Darryl Zahorsky called 8 Simple Rules for Rating a Business Opportunity in which the author asked readers how they rate business opportunities. Do they go with their gut feeling or emotions or do they sit down and really analyze the key ingredients that can make an opportunity succeed or fail before investing their life’s savings? His article stated that emotion and passion are essential to being a success in business (and I agree) and he said that these rules will help make informed decisions to see if the opportunity is a winner.
Emotion and passion is an essential ingredient to business success, but hold off on that inner fire until your business opportunity can pass the 8 simple rules to see if you have a winning business opportunity:
1. Beta Test it: As any successful software developer knows, a beta test gets your product in the hands of users early for critical feedback. Do not keep your idea secret. Share it with a select group of potential users. Without real-world feedback your business opportunity will quickly hit the wall.
2. Find the Right Target: Far too many small businesses fail trying to be everything to everybody. Maybe your idea has potential in multiple markets, but start with one target with the greatest need. Your business opportunity should grasp the attention of a specific and reachable market. ‘Female teenagers who read religious books and media‘ is much more definitive group than ‘all teenagers who have spiritual interests‘.
3. Apply Protection Armor: A new business opportunity is a delicate thing. In order to protect and nurture your business you will need to apply some form of protection armor. This armor will provide assurance that no companies invade and steal your market share. Protection armor can take the form of exclusive contacts, licensing, patents, or the best location on the block.
4. See What They Want: Ultimately, business comes down to the simple task of providing a product or service people need. Simple; yet often overlooked. Your business opportunity is rated high if it meets a customer‘s needs or wants. There may be an open market for a new form of toothpaste, but if consumers do not want another choice of toothpaste, then success will be fleeting.
5. Play The Money Game: Every small business opportunity needs to be evaluated against the cost of building the business. The opportunity can be great, however, if you are not prepared to go out and raise the million required for launch, then this opportunity is not for you. The best business opportunity is one that matches your ability to deal with and raise attainable cash.
6. Bring Your Skills to the Table: A business opportunity can have an incredible upside only if you bring the skills required to succeed. If the business requires you to go way outside your comfort zone, it might be better to find something that more closely mirrors your skills. Ten years of retail experience offers much more chance of success than an opportunity based on telemarketing skills.
7. View the Event Horizon: In the near future, what is the likelihood your business can be replaced by technology, impended by government regulations, or made obsolete by social changes? Perform a quick SWOT analysis to see how your small business opportunity will survive. It is not be realistic to start a music store during the peak of digital piracy.
8. Use the People Factor: Many business opportunities will require a motivated and skilled work force. Make sure you‘re able to fulfill this equation or it will be the one critical success factor which can make or break you. Remember, good people are hard to find. Ponder how you will gain and retain them.
These 8 rules have withstood the test of time for almost any type of business endeavor. So, if your business opportunity meets the 8 simple rules, you have a far greater chance of success!