Last Updated: Oct 24, 2014
Looking for a business to start? There are lots of business ideas out there, but not all of them are good, and not all of them are right for you. Here are four points to consider when evaluating business ideas.
Evaluating business ideas is one of the most prevalent and important tasks for any entrepreneur. Whether you are a small business owner, a business manager, or a C-level executive, you will have to evaluate a business idea at some point in your career and determine whether or not it’s worth putting a financial investment into. Here are four criteria for evaluating your ideas and ways you can judge those criteria for your company’s benefit.
Which of the 4 Cs is Most Important?
None of the 4 Cs are more important than the others. They are all equal. You should write a business plan for your idea and section out each of these criteria within your plan. As you go about evaluating your idea, write down what you discover about each of the 4 Cs so that you have it in writing. Make it visual in order to evaluate it more effectively.
You need to know everything about your company. That includes financial information, how many employees you have, your marketing initiatives (both those in force now and future plans), real estate available for dedicating to your idea, and much more. Leave no stone unturned. The larger your company, the more time it will take to research what you have to offer the implementation of the idea and its impact on the market.
Your customers may be more difficult to evaluate. How much do you already know about them? Start with that and work your way out from there. Segment your customers into groups, if possible. How will your business idea affect each group?
Evaluating the competition has its dangers. Don’t do anything illegal. Stick with public information sources. Subscribe to newsletters, read annual reports and blogs, and get a handle on which companies are most poised to be a threat to your business overall and, more specifically, your new business ideas.
Collaborators are more difficult to know than your own company but easier than customers and competitors. In most cases, you can simply ask your business partners what they think of an idea. Be careful that you don’t reveal any trade secrets. They may be collaborators, but that doesn’t mean that word won’t get around to unfriendly corners of the market. Protect your ideas until you are ready to go public with them, but do ask your collaborators for feedback. Do it as early on as you can so you can incorporate that information into your plans.
When you want to implement a new business idea, check the 4 Cs—your Company, your Customers, your Competition, and your Collaborators. Mine them for information and solicit feedback before implementation.
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