How to Evaluate a Business Opportunity

In these tough economic times many are looking at starting a business. In a previous article I addressed the traits an entrepreneur needs to have to be successful. Let’s assume that you have read the previous article and that you have decided that you have what it takes to be an entrepreneur. The next step is for you to decide the kind of business you want to start. You can classify your options into 5 broad business categories: • Servicern• Manufacturingrn• Retailrn• Restaurant or Fast Foodrn• Internet Marketing The following 7 criteria will help you in your decision making process and ensure that you are not setting yourself up for failure and disappointment. Do Not Make a Rush Decision. Do not rush into anything without having done a proper analysis of the business, the market, your personal skills and experience. Choose What You Enjoy. This is likely the most important criterion in deciding whether to become a business owner. There will undoubtedly be difficult times and if you were to own a business that does not give you any satisfaction then you are probably not going to make it when things get tough. Consider Your Partner. Consider your partner’s wishes and include them in the decision making process, even if he/she will not be involved with the business. Running your own business has an effect on more people than you alone. It will affect everyone around you, especially your spouse/partner, family and friends. Understand the Business. Know the business that you are going to start or at least be sure that you are able to learn the ins and outs of the business. If possible, start a business with which you are somewhat familiar. For instance, it could be in an industry that you worked in on a previous job. Be Comfortable with the Business. Do not start a business that stretches you to your limit. Be it financially, technically, time wise or emotionally. You should be able to get the business of the ground feeling comfortable about what needs to be done. The business needs “to fit” you. Long Term Potential. Choose a business that has long term economic potential. Stay away from a businesses with a product that is already, or soon will be, obsolete. If you sell a technology product, make sure it is, and stays, leading edge. Look ahead and stay ahead. Be Rational Be realistic in your evaluation of the business opportunity. Look for opportunities nearby and now, instead of far away in time and distance. The greatest opportunities are sometimes right in front of our eyes and we miss to see them. Be careful not to look at opportunities through rose-colored glasses. Be realistic in assessing your own abilities and be cautious in estimating the potential of the business opportunity. Excitement often gets in the way of rational decisions. When you have considered all these facets of your future business, there is one more decision to make. You need to decide whether you want to start the business full time or part time. More on the pros and cons of that choice in a future article or you can order our eBook “Starting Your Own Business.” The 2 volume ebook gives you all the information you need to choose the right business and what you should do to get the business off the ground. If you are still not sure whether owning a business is for you and need some assurance before you take the plunge, download our FREE eBook "Want to Start a Business?"