Star your own bussiness today


Evaluate your bussiness

Most home business entrepreneurs start-upfact that competition exists in that market
with very little money and a strong beliefproves a demand, or at least a need for what
that success will come to them if they workyou offer. However, test for market
hard enough and offer a quality product orsaturation. Unless you are offering a
service. While this positive attitude isgroundbreaking product, stay away from market
essential, it is not enough to guaranteewith extremely few competitors. Lack of
financial success. A lot hinges on yourcompetition could mean that your business
management and marketing skills - and youridea is not profitable to begin with, or that
product  or  service.your idea is so new and unique that no one
has thought of it yet. Few players in the
You can either choose a product-oriented or amarket could also imply that the market may
service-oriented home business. Abe controlled by a monopoly or a cartel, the
product-oriented business allows you tobarriers to entry are too high for a small
either create or manufacture the productfirm, or that the demand is too limited to
yourself, or resell products that are made bysustain another entrant in the market 6. Have
others on a direct sales or drop-ship basis.you priced your product competitively? The
On the other hand, you can opt to engage in aright price for a product or service is one
service-oriented business where you performof the essential elements in a solid business
services at your home (work generallymodel. Don't do yourself injustice; the wrong
performed at home after sale of service) orprice tag is like a ticket to disaster.
perform services from home (some or all workEconomic survival is the primary
performed away from home after sale ofconsideration underlying all pricing
service).decisions. Ideally, a price should meet three
requirements: it should match the
Before you begin to develop your businesscompetition; it should be attractive to your
idea, you need to determine its strength andpotential customers; and it should earn a
viability. Below is a checklist of criteriaprofit for you. Set your prices, not by
to help in evaluating ideas that iscompetition, but based on the needs of your
particularly well suited for you and yourbusiness.
goals. Ask yourself the following questions
when evaluating an idea for a business orDepending on your products, consider pricing
product: 1. Does it satisfy or create ayourself on the higher side: the higher you
market need? Introducing a new productprice yourself, the higher you position
without first testing the market is likeyourself.
jumping off a cliff blindfolded. In fact,
many businesses fail because there is no7. What is the level of difficulty in the
adequate market for their products orcreation or implementation of the product?
services. Before you risk your resources on aYou need to consider the economic factors in
new venture, it is necessary to get anthe execution of the product, such as time,
objective picture of your prospective market.capital investment required, and marketing
Although accurately determining the customercosts, personnel needed, among others. Also
reaction to a new product is difficult, a newdetermine if you have the engineering,
business owner must try to get hold of asproduction, sales, and distribution
much information on the market as he or shefacilities adequate for the product's
can either through a formal market researchimplementation. You may have an excellent
or  through  secondary  research.business idea, but if you do not have the
economies of scale to produce it, then you
The rule is: find a need and fill it. To themight be better off to consider other
extent possible, do not offer a product orproducts (or at least a scaled down version).
service so new or unusual that people cannot
understand why they should buy it - unless8. What are the growth possibilities? Your
you want to spend most of your time andbusiness model stands to succeed if the
resources educating the public. Bigdemand for your products or services can be
companies, with their deep pockets, canexpected to grow with a change in the
afford to launch a massive educationaleconomy. Check if your product can survive a
campaign for breakthrough products. Homemajor  technological  surge  or obsolescence.
businesses, given their size and nature,
often do not have the resources (capital,9. Can I get backend sales? Back-end sales
personnel, technology) to mobilize suchare all the products or services you sell and
campaigns.resell to customers or clients after they
have made their initial purchasing
Also, do not offer a product you love to maketransaction  with  you.
but  whose  market potential is weak at best.
Determine if your product or service will
2. Will the product maintain market appeal?warrant repeat sales. There is real business
Beware of fads and fleeting trends as thesevalue in building a pool of repeat customers.
markets change quickly that your businessThe bulk of the sales, cash flow and current
cannot achieve a sufficient volume or aprofit comes from utilizing and then better
sufficient share of the market. If yourutilizing  a  back  end.
product, however, is a fad, make sure that
you can move fast enough to capitalize on it10. Is the product safe? The safety of a
before it dies. Also determine if yourproduct use is an important consideration for
product or service can be used nationally, ormany consumers, particularly for manufactured
is it simply limited to your geographicalproducts.
area.
If you are in the service business, you need
With the increasing globalization ofto make sure that your personnel are properly
business, you may need to look at thetrained with the goal of satisfying your
international market and see if there iscustomers foremost in their minds. Educate
significant  foreign  competition.your consumers on how best to use the product
and include clear instructions to avoid
3. How unique is your product? The goal is tocostly legal entanglements. Make sure that
be able to differentiate your product fromyour business is insured against various
your competitor. You need to show why yourforms  of  liabilities  that  may  arise.
products and services are unique, distinct,
or of considerably superior than your11. Can my product be promoted with strong
competitors. Every product in the world canadvertising  copy?  Emotion  sells.
be sold or presented in a new way. If you
seriously intend to capture a significantPeople are often motivated to buy a product
market share, your potential customers mustor service because of some emotion, whether
find  more  value  from  your  product.it is greed, fear or want. Response to
advertisements often increases whenever you
4. How useful is your product? Many new ideasinject these elements into your ad. Sit down
and products are successful because theirbefore you write the ad and ask yourself what
creators identified an unmet need in theyou want to feel. Then translate these
market. Identify at the onset how yourfeelings to written words for your
product or service will be used, andadvertising copy. Stress what people can gain
determine  the  frequency  of  product  use.from ordering your product or service
(financial reward, becoming the envy of
Some business ideas fill a real need, but inothers, knowledge to get ahead in life) or
some cases the need have to be createdtell them what they lose if they do not order
through promotional advertising and(loss of time and convenience, discounts for
promotions. This information can help buildordering  before  a  deadline).
your  marketing  strategy.
12. Will you be left with an inventory? Avoid
5. How much competition exists? Remember,inventory risk; make sure that even you will
there is never a "no competition" situation.buy the product. If you have inventory,
You product will always have its competition.consider getting homeowner's or renter's
Determine the kind of competition you willinsurance policy to protect your business
have - locally, regionally, and nationally.against all possible disasters, be it fire,
Look for heavy or moderate competition - thetornado, hurricane or earthquake.



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