Evaluating Venture Opportunities
Many entrepreneurs fail to recognize the commitment and resources required to venture into a business or grow an already existing one. They get into the excitement of creating and fall into having tunnel vision of the possible success of their great ideas and fail to recognize the risks that need to be mitigated or eliminated.
Deciding to start a business or grow anything worthwhile is never an easy feat; choosing to step into the place of creativity, change, and leadership can be hectic if you don’t put measures in place and, if not appropriately managed, can lead to failure. So how does an entrepreneur ensure that their resources aren’t squandered all in the name of creativity?
One thing evident in business is always to know how to differentiate your hobbies and interests from viable business ideas. You should see the difference between doing what feeds your soul with joy, happiness, love, etc. and what will put food on your family’s table.
This article will go through guidelines that have helped individuals and organizations make critical business decisions.
How well does this opportunity fit into where I am or help me get where I need to be?
The start to evaluating business opportunities takes a broad and intuitive approach at the beginning. Every day, we get introduced to a million and one ideas. Focusing on relatable problems and determining a connection between possible solutions to develop a viable business idea starts the entrepreneurial process.
You have to be able to sift through the noise and determine what is important to you or your organization. It helps you understand what areas or industries to focus on when evaluating a list of business ideas to decide what business opportunities you want to turn into business ventures.
It starts with understanding the industry you want to venture into. You need to determine who the key players are, how they go about their day-to-day activities, the type of products their consumers or clients use the most, and the areas that need improvement in their practice. Listen to the needs, wants, challenges and frustrations within the industry. This information will help you identify key business opportunities for creating new markets and improving existing products or services.
It would help if you also discerned the ideal moments for launching a new product or service into a market, the window of opportunity. This moment goes a long way in establishing a suitable business position in a market. Whether you want to enter into an existing value network or create a new one, the demand size and the time a product or service appears in a market determine its earning potential. As the window expands, those who have been able to launch their products or services timely will work towards acquiring the most significant portion of the market, and as the market matures and possible entry for new products or services eventually closes, maintaining competitiveness will be what enhances and sustains growth for the established businesses.
Sometimes, seeing the floor decals isn’t enough to get you from point A to B; people still miss their steps. However, if you know what you need or where you want to get to, the signs get clearer and make it easier to shape and create openings even when unexpected change occurs.
Does this opportunity fill a niche?
It is essential to understand that most business ideas don’t create a need. As an entrepreneur, you need to understand the difference between a business idea and a business opportunity. Every business opportunity is based on an idea, but not every idea has the potential to be a business opportunity.
When creating or identifying business opportunities, four characteristics remain familiar to them, which are: attractiveness, durability, timeliness and that the opportunity is delivered as a product, service, or business that creates or adds value to the end-user.
Does your business idea provide value to a sustainable market? Are you trying to create a business where you have to conduct a couple of trials and errors before you create a market for it, or are you creating a product based on the need of a particular market? Either way, you don’t want to create a product no market wants or create a product that does not provide any form of uniqueness or exclusivity because having a competitive advantage dramatically increases the likelihood of success.
Take your time performing research and analyzing the market you want to launch your product into to understand the demand.
Does my business analysis give a positive result?
This is where the real work is, but sadly, most entrepreneurs don’t spend the time required for this step of the process, and it almost always shows in the later stages of the business development and most times comes at a high cost.
From the moment you venture into a new business, it is necessary to put in continuous work to ensure the company’s growth. This makes it paramount for an individual or organization to determine the variables needed to enhance the development of your business idea. What legislative acts are essential for your business to thrive? What are the resources required? What are the talents required for this business? What is the financial viability of the venture? These are some of the questions that need to be pondered on and repeatedly answered at different stages of your business analysis.
The analysis gives insight into the feasibility and sustainability of the business opportunity to help reduce risks and prevent losses.
You must determine what business model will work best for this business opportunity, your customer segments, value propositions, and the channels required to run your business effectively. All this goes into your business plan, the roles necessary for effectively running the business, SWOT analysis, industry background, competitor analysis, marketing strategies, and the likes.
You must perform the assessments required to determine if your idea is viable. This takes me back to an earlier statement; you have to know how to differentiate your hobbies and interests from possible business ideas and then determine if those ideas are business opportunities. This is not to say that there aren’t examples of businesses that have developed into multi-billion dollar conglomerates just from passive ideas; this is me telling you to put in the work to make sure your business does not die before it even has the chance to grow.
Be ready to start over.
I believe this is where most people struggle; it is always hard to leave a dream after so much has been invested in it, but to ensure resources do not dwindle on something that will never generate returns, it is necessary to view this entire process as a learning scheme. You need to objectively decide what is best for your business and future as an entrepreneur.
Practice does make a difference, and as you go through this process repeatedly, you start noticing the signs earlier on that tell which ideas are opportunities and which opportunities are worth taking the risk. In the following article, we will be going in-depth on the planning process in successfully taking a business idea to a business venture.