C14 - Reality Check

NNow, you are ready with a few wonderful business ideas. Before investing your energy, money and time in the new venture, you must make sure that the idea will work in real life situation. In this chapter, you will check various aspects of your ideas against the following check list, the grindstone of reality.

The reality check list is not exhaustive. It deals only with the aspects new entrepreneurs forget to work out. If you like, you can add new items to the list. If an aspect is not applicable to your venture just ignore it. Write down whatever idea, silly or super, that pops up on your brilliant head. If you are able to come up with many positive ideas, then go ahead. Otherwise, develop another business concept.

Don't proceed to the next chapter, unless you have spent time in checking all the aspects of your business concept and you feel you will really succeed.

Neither jump to conclusions nor let the conclusions jump on you about your business concepts. What interests you will make you happy. What interests your customer will make you rich. So, you have to find out something that you like to do and your customer will buy from you. It is a good idea to talk to professionals or experienced people about you business concepts.

Reality Check #01
Your Passion
Do you feel a passion for your product, service or business? You will be an achiever only if you really enjoy what you are doing. If you don't enjoy your business but still want to make money, then find some other business that will give you pleasure.

Reality Check #02
Usefulness
Does you product or service solve a problem? Does it create an opportunity or deliver benefits? Does your product enhance security? Does it improve something valuable to the user? Does it improve the quality of the user's life?

If you sell useless products, your business will not be able to survive even for a short time.

Reality Check #03
Competition
Never fear competition. Heavy Competition clearly shows that there is a great demand for the product or service. So, such competition must boost your confidence in the market. However, you must beat your competitors by offering better product or service.

Reality Check #04
High Quality
Are you sure your product is of high quality? If you have competitors, does your product excel them in quality and exceed them in quantity? If you are unable to produce high quality product or high quality service, get trained in areas where you are weak, or hire professionals to improve quality and then launch your business.

Reality Check #05
Promotability
Will you be able to promote your business at a low or no cost? Your business cannot grow unless there is a way to promote it.

Reality Check #06
Market Size
We love to have a world size market. However, there are many factors that will decide the market size. For service businesses, the number of customers you can service at any point of time will be very low. Make sure that there is a market and you can reach it.

Reality Check #07
Uninterrupted Supply
Will you be able to influence the supply of your product? If you are a dealer, what will you do if the supplier does not support you? Do you have alternative arrangements?

Reality Check #08
Niche Factor
Niche is the only thing that can give you an instant success. In the present internet world, when all conceivable and inconceivable business models are tried, you must go for a niche. A niche product targets a specific group of customers within a general group.

Soap is a general product. A bathing soap for Alsatian dogs in Ooty is a niche product. Everything has its niche versions. First, develop a general product. Separate the core and common components. Change the variables and you can create many niche products. Use your common sense. You may never be able to sell honey for polar bears in Sahara, though such honey is a niche product.

Reality Check #09
Profit Margin
Everyone loves to sell the product that gives the highest profit margin. There is a simple way to decide the price and profit margin.

If you were the buyer, would you pay the price? Now, you have the right price.

Reality Check #10
Customer Support
How much support will your customers need? Will you be able to give support through automated email system or telephone? Is there a possibility of converting the support into another source of income?

Reality Check #11
Romance
The market is ruled by fashion. Is your product in harmony with the current trend? Will you be able to build some romance around your product or service?

Reality Check #12
Delivery

You must be able to deliver your product or service at a low cost to you and to your customer. Can you travel 50 miles everyday just to take English Tuition class for one customer? Can you really ship two tons of easily available cheap iron scrap to an overseas buyer and still make profit?

Reality Check #13
Inventory
Will you be able to carry the inventory at a low cost? Buying in bulk may give bargaining power to you. However, the cost of carrying and space requirements must be considered. How soon will they be obsolete?

Reality Check #14
Time
How much do you value your time? Do you have enough time to develop, manage and expand your business? If you offer service, time will directly influence your profit.

Reality Check #15
Repeat Potential
Will your product or service attract the customer to buy again and again from you? If you sell a consumable like washing soap, the repeat potential is high. If you teach English or Maths to a preschooler, you can teach advanced English or Maths when he goes to high school.

Reality Check #16
Referral Potential
No advertisement is as great as a favorable word from an existing customer. Will you be able to get such referrals from your customers? Only if you have a great product or service, you will be able to get them. Some types of business like consulting thrive solely on the strength of referrals. Even if you carry on online business, referrals through email will work wonders.

Reality Check #17
Related Products
Does your product have the potential to attract customers for related products? If you sell Kohinoor diamonds, think of selling crowns and thrones also. If you sell sarees to your friends, sell them matching blouses and petticoats also.

Reality Check #18
Community
Will you be able to create a community? If you run a website for new method of education, building up a community of mothers will help you market many products for young children. You may even end up selling diamond jewelry to their mothers.

Reality Check #19
Space
How much space will you need to operate comfortably? If you do home-based internet business, a table and chair in a corner of your bedroom will do. However, you must respect even that small space.

Reality Check #20
Finance
Be careful about borrowing when you don't have experience in business. When there is no cash inflow, debt should be the last thing you'll think of. If you are resourceful, you can always find money. Look around you for hidden money in unexpected sources.

Reality Check #21
Technology
You can automate and simplify many activities, if you learn to use latest gadgets and technology. For example, internet banking will save dozens of valuable working hours every month. If you use technology from the start, you will grow quickly without pain.

Reality Check #22
People
Will you be a one-person mega corporation? Will you need assistants? If you hire, will you be able to manage them effectively and pay them regularly?

Reality Check #23
Networking
Does your business have potential for networking with other businesspersons? Can you network with your competitors? Harmonious working relationship with people around you will do wonders for your business.

Reality Check #24
Organization
Organization is an invisible force that integrates all aspects of your business. Draw a flowchart, a picture of business workflow, and try to integrate all components to ensure smooth operation.

Reality Check #25
Legality
Make sure that your business is legal in every jurisdiction you operate. Even if you sell a few dozens mangoes from home, make it legal by complying with the law. Life will suitably reward you.

Reality Check #26
Customer's Viewpoint
Analyze your product from your customer's point of view. If you have a similar need and if someone like you offers the product, would you buy from him? If not, what would be your objection?

Research Your Business
Big companies spend billions and millions of dollars in research and development activities to improve their existing products, services, systems and processes or to create new products, services, systems and processes.

You must do a thorough research about your idea and about yourself. You can do that by spending just a few hundred rupees on internet. Using search engines like Google, make a list of websites that will help you improve your skills and business. Visit them often.

Try hard to improve your existing skills, to discover your hidden skills, to create a new business and to improve an existing business. When you have tried hard, then try harder.

If you can conceive something, and if it is real to you, certainly you can achieve it. Try to improve yourself, improve products, improve methods, improve systems, improve ideas and you will be making money in no time.