Will this be a business? 5 things to check first when you come up with a great idea.
“Does this sound like a good business idea?”
If you come up with such a great business idea, you should first review the five basic elements presented by Carl Vesper, a renowned management scholar in the field of entrepreneurship education.
- Is it something I like?
- Is it what I am good at?
- Is it feasible?
- Do I have customers?
- Is it a profitable business?
- Is it something I like? (The level of attractiveness that the founder feels about the item)
I know the answer to this question best.
Entrepreneurship is a job that requires a level of immersion and dedication that grinds me.
Immersion and dedication to work you don’t even like is impossible.
- Is it what I am good at? (Founder’s competency)
You need to distinguish between what you like and what you are good at.
“Career” is the clearest indication of whether a founder is good at something or not.
The question “Do you have relevant experience?” means “Have you had a chance to verify that you can do it well?”
If you don’t have relevant experience, in other words, if you haven’t had a chance to verify whether you can do it well, the words “I can do it well” are often just your own assertion.
- Is it feasible? (feasibility)
You have to consider the feasibility of creating, selling to customers, and making money.
If my item is a new item that did not exist in the existing market, a lot of time and effort will be invested in reviewing the feasibility.
If a similar item is in the existing market, the feasibility can be evaluated rather high.
This is also the reason why “too new items” are not recommended for prospective founders who lack startup experience.
- Do you have customers to buy from? (appeal to customers)
This topic can be broken down into three specific questions.
4-1. Who are the customers willing to pay and buy?
4-2. Are there enough of them?
4-3. How do they make decisions?
- Is it a profitable business? (Profitability)
① How much does it cost to make it, ② How much does it cost to sell it for, ③ How much is left over, ④ How much money you can earn by doing so.
Of course, if you can check this on your own, you are already a founder with considerable business capabilities.
It is not an easy area for prospective entrepreneurs, but it is also a must-have process when reviewing a business.
If you have come this far, you can now write a business plan.
If you start digging deep into each of these five checkpoints, the problems are endless.
In particular, 3 to 5 are quite difficult areas to call “basic” if you are a prospective founder.
Rather than investing a lot of time and effort, it is better to use it for a quick, rough review of ideas before writing a business plan.
If the review results are positive, these five elements will form the basis for the content of your business plan.
If the review results are negative, there is no need to write a business plan, saving time and effort.
Monday, March 13, 2023 Baek Jihoon
