Many variables determine the feasibility of your business idea. Having initial clients or product sales are insufficient bases for starting a business. The long-term success of your business depends on how much you know about the market within the industry; how well you understand the consumers and the competition; how well you are able to get your product to the market; and, how thoroughly you can get information about your product to consumers. Successful entrepreneurs are “customer-needs focused”; they deliver a product customers need or want.
You must know the market size, the potential number of customers for your product or service. You must know how fast the market is growing. Is it a new growth, mature, or declining market? Will you distribute your product or provide your service locally, regionally, nationally, and internationally? How will you position your product or service in the market? The consumer often prefers getting “more for less money,” but quality products and services often impact the consumers’ decision to buy. Your product or service must offer features that make consumers choose yours over the competition.
You must consider the barriers to market entry. Start-up costs for a manufacturing operation are extremely high compared to a home-based consulting business. Other barriers include seasonality, lengthy business start-up time, existing or upcoming government regulations, and expertise you may need but don’t possess.