Is Your Small Business Model or Idea Viable?
If you employed people including managers to run every aspect of your business would you still be in profits? If you answered yes, then you passed the first test of being a viable business for the longer term.
1st Test of Viability
Most businesses make or show a little profit mainly because their owner and founder is working a 90 hour week and taking out very little. Will your business still make profits if you removed yourself from the equation and paid proper salaries to your managers?
Business is all about making money. It is great to be in a business that you love, but if the money isn't pouring in by year 3 then it is definitely time to look at other ideas.
2nd Test of Viability
Can you sell it? If you have a business model that can only work if the buyer has a lot of specialised knowledge then it is going to be difficult to sell.
If the reason for the profitability is all in your head and hard to duplicate then it is really not viable for any purchaser. Speak to your accountant and find out how easy or difficult it would be to sell your business.
3rd Test of Viability
Is the marketplace for your products declining? Is the competition getting fiercer by the day? If you have a small business then perhaps you can get away with being in a declining, mature and competitive market. However if you control a larger company then it is time to start diversifying and enter a market place that is also viable for the longer term.
Starting a New Business?
If you are thinking about starting a new business the first step in evaluating your business idea is to create a business plan. This is the first step in working out if your business idea would pass the viability test of your accountant and bank mangers.
You will need to ask yourself some key questions like:
* What size of premises do you need initially?
* How many staff will be required in the first year?
* How much money will you require to inject in the business?
* How will you raise extra funding?
* What are the strengths and weaknesses of your competitors?
* What qualities to do you bring to the business?
The more detailed your business plan is the more likely you are to raise funding. Remember that the banks do not get a share of the profits but instead make small margins by charging you interest and bank charges.
They do not care if you stand to make a fortune. They are mostly concerned with your ability to repay the loan and therefore your business idea must be viable and make economic sense.
They will also evaluate you as a person to see if you have the qualities required to take your idea from paper and turn it into reality. You will need to demonstrate that you have the required knowledge to enter the market place and if required the right people for the key positions like sales and marketing.
1st Test of Viability
Most businesses make or show a little profit mainly because their owner and founder is working a 90 hour week and taking out very little. Will your business still make profits if you removed yourself from the equation and paid proper salaries to your managers?
Business is all about making money. It is great to be in a business that you love, but if the money isn't pouring in by year 3 then it is definitely time to look at other ideas.
2nd Test of Viability
Can you sell it? If you have a business model that can only work if the buyer has a lot of specialised knowledge then it is going to be difficult to sell.
If the reason for the profitability is all in your head and hard to duplicate then it is really not viable for any purchaser. Speak to your accountant and find out how easy or difficult it would be to sell your business.
3rd Test of Viability
Is the marketplace for your products declining? Is the competition getting fiercer by the day? If you have a small business then perhaps you can get away with being in a declining, mature and competitive market. However if you control a larger company then it is time to start diversifying and enter a market place that is also viable for the longer term.
Starting a New Business?
If you are thinking about starting a new business the first step in evaluating your business idea is to create a business plan. This is the first step in working out if your business idea would pass the viability test of your accountant and bank mangers.
You will need to ask yourself some key questions like:
* What size of premises do you need initially?
* How many staff will be required in the first year?
* How much money will you require to inject in the business?
* How will you raise extra funding?
* What are the strengths and weaknesses of your competitors?
* What qualities to do you bring to the business?
The more detailed your business plan is the more likely you are to raise funding. Remember that the banks do not get a share of the profits but instead make small margins by charging you interest and bank charges.
They do not care if you stand to make a fortune. They are mostly concerned with your ability to repay the loan and therefore your business idea must be viable and make economic sense.
They will also evaluate you as a person to see if you have the qualities required to take your idea from paper and turn it into reality. You will need to demonstrate that you have the required knowledge to enter the market place and if required the right people for the key positions like sales and marketing.
If you employed people including managers to run every aspect of your business would you still be in profits? If you answered yes, then you passed the first test of being a viable business for the longer term.
1st Test of Viability
Most businesses make or show a little profit mainly because their owner and founder is working a 90 hour week and taking out very little. Will your business still make profits if you removed yourself from the equation and paid proper salaries to your managers?
Business is all about making money. It is great to be in a business that you love, but if the money isn't pouring in by year 3 then it is definitely time to look at other ideas.
2nd Test of Viability
Can you sell it? If you have a business model that can only work if the buyer has a lot of specialised knowledge then it is going to be difficult to sell.
If the reason for the profitability is all in your head and hard to duplicate then it is really not viable for any purchaser. Speak to your accountant and find out how easy or difficult it would be to sell your business.
3rd Test of Viability
Is the marketplace for your products declining? Is the competition getting fiercer by the day? If you have a small business then perhaps you can get away with being in a declining, mature and competitive market. However if you control a larger company then it is time to start diversifying and enter a market place that is also viable for the longer term.
Starting a New Business?
If you are thinking about starting a new business the first step in evaluating your business idea is to create a business plan. This is the first step in working out if your business idea would pass the viability test of your accountant and bank mangers.
You will need to ask yourself some key questions like:
* What size of premises do you need initially?
* How many staff will be required in the first year?
* How much money will you require to inject in the business?
* How will you raise extra funding?
* What are the strengths and weaknesses of your competitors?
* What qualities to do you bring to the business?
The more detailed your business plan is the more likely you are to raise funding. Remember that the banks do not get a share of the profits but instead make small margins by charging you interest and bank charges.
They do not care if you stand to make a fortune. They are mostly concerned with your ability to repay the loan and therefore your business idea must be viable and make economic sense.
They will also evaluate you as a person to see if you have the qualities required to take your idea from paper and turn it into reality. You will need to demonstrate that you have the required knowledge to enter the market place and if required the right people for the key positions like sales and marketing.
1st Test of Viability
Most businesses make or show a little profit mainly because their owner and founder is working a 90 hour week and taking out very little. Will your business still make profits if you removed yourself from the equation and paid proper salaries to your managers?
Business is all about making money. It is great to be in a business that you love, but if the money isn't pouring in by year 3 then it is definitely time to look at other ideas.
2nd Test of Viability
Can you sell it? If you have a business model that can only work if the buyer has a lot of specialised knowledge then it is going to be difficult to sell.
If the reason for the profitability is all in your head and hard to duplicate then it is really not viable for any purchaser. Speak to your accountant and find out how easy or difficult it would be to sell your business.
3rd Test of Viability
Is the marketplace for your products declining? Is the competition getting fiercer by the day? If you have a small business then perhaps you can get away with being in a declining, mature and competitive market. However if you control a larger company then it is time to start diversifying and enter a market place that is also viable for the longer term.
Starting a New Business?
If you are thinking about starting a new business the first step in evaluating your business idea is to create a business plan. This is the first step in working out if your business idea would pass the viability test of your accountant and bank mangers.
You will need to ask yourself some key questions like:
* What size of premises do you need initially?
* How many staff will be required in the first year?
* How much money will you require to inject in the business?
* How will you raise extra funding?
* What are the strengths and weaknesses of your competitors?
* What qualities to do you bring to the business?
The more detailed your business plan is the more likely you are to raise funding. Remember that the banks do not get a share of the profits but instead make small margins by charging you interest and bank charges.
They do not care if you stand to make a fortune. They are mostly concerned with your ability to repay the loan and therefore your business idea must be viable and make economic sense.
They will also evaluate you as a person to see if you have the qualities required to take your idea from paper and turn it into reality. You will need to demonstrate that you have the required knowledge to enter the market place and if required the right people for the key positions like sales and marketing.
posted by zzzzzzzzzzz at
4:19 AM
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