If you have invented a product, it needs to be tested in the marketplace. Just because you think you’ve invented the next big thing, doesn’t mean that consumers will agree. If you haven’t invented anything but you are searching for a business to try on your own, work with a company that has a proven business model. If others have been successful, your chances of success are greater.

Nobody likes doing research. But if you don’t have people who need or what you are selling, then your business will flop. Most people can’t sell ice to penguins. Market research must be conducted so that you know there are consumers to sustain your business for the long haul. If you are entering into a business opportunity set up by an outside company or person, make sure you ask them about their market research.

If you can expand your business over time, it’s much better than a business that cannot be grown. Figure out if you will be able to offer more products, open more locations, reach more customers, utilize changing technology, etc. Growth plans should include working with your local segment’s projected changes as well. If you run a local service for retirees, but retirees are leaving your local area, you have zero room for growth, unless, of course you can figure out how to reach those retirees where they are moving. It’s important to think outside the box also you can spot all growth opportunities.

You also don’t want to get caught up in trendy ideas. Trends are fleeting and can cost you your entire business. Good business ideas are based on strong foundations, not fads.

What is the Profit Margin?

Profits are the most important aspect of a business. No profit = no business. It’s important to calculate profit margin correctly. If you make custom picture frames and sell them for $50, that’s great, but if the materials cost $20 and it takes you 10 hours to craft one, the profit margin is terrible because you just worked for $3 an hour!

____________________