How can you evaluate business ideas for growing your company? Which products or services make sense to offer? Here are four points to consider when determining which ideas are would be best for growing your business.
Evaluating business ideas is one of the most common and important tasks for any entrepreneur. Whether you are a small business owner, a business manager, or a C-level executive, you will often look for or encounter ideas for growing your business. How can you tell which ideas are worth the time and money to pursue? Here are four criteria for evaluating your ideas and ways you can judge those criteria for your company’s benefit.
4 things to consider when evaluating business ideas
- Company – I’m talking about your company. What do you do and how well do you do it? Are you the leading company in your industry? Second place? You need to know your company’s strengths and weaknesses. Do you have the resources necessary to turn your business idea into a winning marketplace performer? If not, why not? What would it take to get your company to the point to where it could manage the business idea from fruition to success?
- Customers – Who are your customers and what do they want? What do they value? Do you serve a particular demographic? What aspects of your business idea would they find most appealing? What about your idea might they not like? These are questions you’ll need to know about your customers before you start manufacturing or marketing your idea. If you don’t know your customers, you’ll never be able to satisfy them.
- Competition – Who is your competition? Better yet, what companies or individuals are your stiffest competitors? Is anyone else in the marketplace doing what you want to do? If so, how successful are they? Are their clients happy? Why or why not? How will your business idea differ from what is already in the market? How can you improve upon the competition’s product or service? Here’s how to conduct competitor research before you roll out that business idea.
- Collaboration – Have you polled your business partners to see if they like your idea? You should. Your collaborators may think of things you haven’t. In fact, you may find that a member of your team has already tried what you want to try. You can learn from their experience. You should also concern yourself with how your business idea could potentially impact your collaborators and business partners. Will it affect your relationship with them in any way? Don’t allow yourself to be blindsided. Explore all possibilities before you implement your idea.
Which of the 4 Cs is Most Important?
None of the 4 Cs are more important than the others. They are all equal. You should write a business plan for your idea and section out each of these criteria within your plan. As you go about evaluating your idea, write down what you discover about each of the 4 Cs so that you have it in writing. Make it visual in order to evaluate it more effectively.
You need to know everything about your company. That includes financial information, how many employees you have, your marketing initiatives (both those in force now and future plans), real estate available for dedicating to your idea, and much more. Leave no stone unturned. The larger your company, the more time it will take to research what you have to offer the implementation of the idea and its impact on the market.
Your customers may be more difficult to evaluate. How much do you already know about them? Start with that and work your way out from there. Segment your customers into groups, if possible. How will your business idea affect each group?
Evaluating the competition has its dangers. Don’t do anything illegal. Stick with public information sources. Subscribe to newsletters, read annual reports and blogs, and get a handle on which companies are most poised to be a threat to your business overall and, more specifically, your new business ideas.
Collaborators are more difficult to know than your own company but easier than customers and competitors. In most cases, you can simply ask your business partners what they think of an idea. Be careful that you don’t reveal any trade secrets. They may be collaborators, but that doesn’t mean that word won’t get around to unfriendly corners of the market. Protect your ideas until you are ready to go public with them, but do ask your collaborators for feedback. Do it as early on as you can so you can incorporate that information into your plans.
When you want to implement a new business idea, check the 4 Cs—your Company, your Customers, your Competition, and your Collaborators. Mine them for information and solicit feedback before implementation.
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