Making a Case for Your New Business
Creating a business case prior to actually starting a business may help prevent a disastrous venture doomed to failure. All of us are prone to falling in love with an idea and thinking that the world will embrace it. It won’t. Too often businesses are built on wishful thinking. Instead, an idea for a business must be examined and tested for validity.
Here are the steps that need to be taken:
Crunch the numbers of your idea
Develop a forecast showing your best and worst scenarios.
When will you break even?
Develop a cash flow projection. Will there be adequate financing to pay for it all?
Develop individual projections for various pricing environments.
Develop individual projections for each competitive reaction.
Examine user needs
Ask prospective customers whether they like, want and need your business. Will they receive value and benefits from your offerings? This step is often skipped because we think we know best. The goal is to hear from customers what they want, need and will be delighted by.
You need to answer the following questions:
How are the prospects currently solving their problem?
What problems are left unsolved?