A successful entrepreneur is always on guard for the next big thing. They actively seek opportunities to grow, expand, and diversify their assets. At the same time, they’re well aware that not all ideas poised to be the next big thing are worth pursuing. More often than not, such ideas are only good for the time being — catching on now, but fizzling out later. If you’re an aspiring entrepreneur, you should be able to master the art of filtering through opportunities as early as now. Start training yourself by asking these questions whenever you’re confronted with business opportunities:
Who’s the target market?
If you’re trying to buy an existing business, remember that its success depends largely on the audience it’s catering to. A product or a service stays in the market if it meets the needs of the market. Before jumping to any venture, you should have a clear understanding of who you’re serving, which includes what makes them tick, what their problems are, how they consume goods, who influences their purchase decisions, etc.
If you’re exploring a franchising opportunity, let’s say choosing among fast-food franchises, Hot Dog on a Stick recommends asking the parent companies about customer profiles, case studies, and competitor analysis. You can also do some informal interviews on the ground, visiting stores and talking to consumers directly what they think about the brand. From here, you can evaluate more accurately if the business indeed resonates to their market.
What’s the financial status?
Of course, you need to check how lucrative your investment will be. If you’re considering getting an existing business, learn about its financial history. Focus on the spikes and dips in sales and profit, as well as significant investments and expenses on supplies. With this, you can have a pretty good idea of how much you’ll earn in a certain period.
On the other hand, if you’re exploring a new service or product to add to your existing operations, you should be able to assess accurately your own finances. Ask yourself if your current financial status would be a good foundation for launching this new offering. If yes, then it’s worth pushing through with it. If not, you can postpone the launch, while you pitch to investors. The bottom line here is you have to study the financial aspect of business opportunities.
Where’s the industry headed to?
Certain factors in the industry can give you an idea if an opportunity is promising or not. For instance, pending legislations would inform you how the business you’re eyeing will be affected. The same applies to the rise of technology devices and the creation of niche markets. So, you want to monitor these factors when evaluating business opportunities.
Stay updated on industry updates. Read industry publications. Turn on your Google alerts. Find a mentor who can train you in forecasting trends. Join a business community. The more that you know about what’s happening, the better you can look at opportunities with discerning eyes.
Business opportunities aren’t created equal. You have to cherry pick on them. You have to get the most promising. You always have to pause and ask: is this worth it?