Deciding on a new venture

New business ideas

If you have ever thought about starting a new business and were unsure of whether or not it makes sense then this post is for you. Ideas for new businesses are a dime a dozen, but the execution of that idea is what will make it a success. However, even before it’s time to execute the new idea, one has to distinguish between a good idea and a not so good one. Many factors go in to this assessment, many of which are dependent on the entrepreneur’s personal situation. Things like relevant knowledge, experience, capital and other resources have a major impact on the business’ potential.

Some ideas seem really good and when you analyze the competition you may see that there is not a really strong competitor in the field or perhaps the market is largely untapped. However, this alone is not a good enough reason to put your blood, sweat and tears in to it. You need to see if you are capable of doing the work well. I am not talking about the business side or management side (you probably feel that you are capable in that regard otherwise you wouldn’t be looking to start a new business), I am referring to the actual nitty-gritty work that this business requires. This might be cleaning if you are thinking of a cleaning service of some sort or technical know-how for a software development company, etc… If you hate or are terrible at cleaning then, a cleaning service may not be a good fit for you, for example.

Once that has been cleared, you MUST look at the financials. Make realistic projections and pessimistic projections to see how this idea will fair in worst case scenarios. If you see that in order to break even (that is, beyond your start-up costs, but on a month to month basis) you would need the business to perform well every month just to stay afloat, then something is wrong. Perhaps it is only a tweak in your plan that is needed to reduce some unnecessary costs or maybe the truth is grimmer. Often times, it is the financial portion of your business plan that will tell you whether or not this idea will fly.

It is important to not persuade yourself that you can do it when the facts tell a different story. If all your tweaking to your plan and numbers still make it tough to turn a profit that you are satisfied with then, you should think about scrapping this idea. I’m all about not giving up and persevering, but a certain point, you need to know when it is time to move on to something better.

By taking these measures, you will give yourself the best chance to succeed in your new business.