You have a fabulous idea for a business. But how do you know if you should put your idea into action? First, you need to determine if your idea will make money. This can be particularly difficult if you have never started a business before. Take this quiz to discover if your idea has profit potential.
Answer "yes" or "no" to the following questions. Give yourself two points for every yes answer, zero points for every no. An evaluation of your score follows the quiz.
1. Can you tell customers why they should buy from you instead of your competition?
2. Do you know how to reach the people who would want to buy your product or service?
3. Is the price you need to charge to be profitable competitive?
4. Do you have the start-up cash to act now?
5. Does your business idea serve a niche or growing market?
0-3: Don't quit your day job just yet. Your idea may not be profitable or it may need some work. You might have a great idea, but if you can't reach customers or compete with competitors in terms of price or quality, it is not a profitable idea. You also have to be realistic about the money and the resources necessary to launch this business. Visit a Service Corps of Retired Executives (SCORE) counselor to work on the idea until it's ready to fly.
4-6: You are almost there. Your idea could be profitable with a little bit of work. You are entering a growing market, and you have the resources to get started. You know why potential customers should buy your product instead of your competitors', so devise a plan to communicate that to them.
7-10: Go for it! Your business idea has profit potential. You have competitive prices and quality. You know exactly who your potential customers are and how to reach them. This is a growing market. With careful planning, you could be on your way to success. Visit a SCORE counselor for assistance in planning your new business.
Copyright 1999 Service Corps of Retired Executives (SCORE). All rights reserved.