Evaluate your bussiness

Most home business entrepreneurs start-up with verya demand, or at least a need for what you offer.
little money and a strong belief that success will comeHowever, test for market saturation. Unless you are
to them if they work hard enough and offer a qualityoffering a groundbreaking product, stay away from
product or service. While this positive attitude ismarket with extremely few competitors. Lack of
essential, it is not enough to guarantee financialcompetition could mean that your business idea is not
success. A lot hinges on your management andprofitable to begin with, or that your idea is so new and
marketing skills - and your product or service.unique that no one has thought of it yet. Few players in
You can either choose a product-oriented or athe market could also imply that the market may be
service-oriented home business. A product-orientedcontrolled by a monopoly or a cartel, the barriers to
business allows you to either create or manufactureentry are too high for a small firm, or that the demand
the product yourself, or resell products that are madeis too limited to sustain another entrant in the market 6.
by others on a direct sales or drop-ship basis. On theHave you priced your product competitively? The right
other hand, you can opt to engage in aprice for a product or service is one of the essential
service-oriented business where you perform serviceselements in a solid business model. Don't do yourself
at your home (work generally performed at homeinjustice; the wrong price tag is like a ticket to disaster.
after sale of service) or perform services from homeEconomic survival is the primary consideration
(some or all work performed away from home afterunderlying all pricing decisions. Ideally, a price should
sale of service).meet three requirements: it should match the
Before you begin to develop your business idea, youcompetition; it should be attractive to your potential
need to determine its strength and viability. Below is acustomers; and it should earn a profit for you. Set your
checklist of criteria to help in evaluating ideas that isprices, not by competition, but based on the needs of
particularly well suited for you and your goals. Askyour business.
yourself the following questions when evaluating anDepending on your products, consider pricing yourself
idea for a business or product: 1. Does it satisfy oron the higher side: the higher you price yourself, the
create a market need? Introducing a new producthigher you position yourself.
without first testing the market is like jumping off a cliff7. What is the level of difficulty in the creation or
blindfolded. In fact, many businesses fail because thereimplementation of the product? You need to consider
is no adequate market for their products or services.the economic factors in the execution of the product,
Before you risk your resources on a new venture, it issuch as time, capital investment required, and
necessary to get an objective picture of yourmarketing costs, personnel needed, among others.
prospective market. Although accurately determiningAlso determine if you have the engineering, production,
the customer reaction to a new product is difficult, asales, and distribution facilities adequate for the
new business owner must try to get hold of as muchproduct's implementation. You may have an excellent
information on the market as he or she can eitherbusiness idea, but if you do not have the economies of
through a formal market research or throughscale to produce it, then you might be better off to
secondary research.consider other products (or at least a scaled down
The rule is: find a need and fill it. To the extent possible,version).
do not offer a product or service so new or unusual8. What are the growth possibilities? Your business
that people cannot understand why they should buy itmodel stands to succeed if the demand for your
- unless you want to spend most of your time andproducts or services can be expected to grow with a
resources educating the public. Big companies, withchange in the economy. Check if your product can
their deep pockets, can afford to launch a massivesurvive a major technological surge or obsolescence.
educational campaign for breakthrough products.9. Can I get backend sales? Back-end sales are all the
Home businesses, given their size and nature, often doproducts or services you sell and resell to customers
not have the resources (capital, personnel, technology)or clients after they have made their initial purchasing
to mobilize such campaigns.transaction with you.
Also, do not offer a product you love to make butDetermine if your product or service will warrant
whose market potential is weak at best.repeat sales. There is real business value in building a
2. Will the product maintain market appeal? Beware ofpool of repeat customers. The bulk of the sales, cash
fads and fleeting trends as these markets changeflow and current profit comes from utilizing and then
quickly that your business cannot achieve a sufficientbetter utilizing a back end.
volume or a sufficient share of the market. If your10. Is the product safe? The safety of a product use is
product, however, is a fad, make sure that you canan important consideration for many consumers,
move fast enough to capitalize on it before it dies. Alsoparticularly for manufactured products.
determine if your product or service can be usedIf you are in the service business, you need to make
nationally, or is it simply limited to your geographicalsure that your personnel are properly trained with the
area.goal of satisfying your customers foremost in their
With the increasing globalization of business, you mayminds. Educate your consumers on how best to use
need to look at the international market and see ifthe product and include clear instructions to avoid
there is significant foreign competition.costly legal entanglements. Make sure that your
3. How unique is your product? The goal is to be ablebusiness is insured against various forms of liabilities
to differentiate your product from your competitor.that may arise.
You need to show why your products and services11. Can my product be promoted with strong
are unique, distinct, or of considerably superior thanadvertising copy? Emotion sells.
your competitors. Every product in the world can bePeople are often motivated to buy a product or
sold or presented in a new way. If you seriously intendservice because of some emotion, whether it is greed,
to capture a significant market share, your potentialfear or want. Response to advertisements often
customers must find more value from your product.increases whenever you inject these elements into
4. How useful is your product? Many new ideas andyour ad. Sit down before you write the ad and ask
products are successful because their creatorsyourself what you want to feel. Then translate these
identified an unmet need in the market. Identify at thefeelings to written words for your advertising copy.
onset how your product or service will be used, andStress what people can gain from ordering your
determine the frequency of product use.product or service (financial reward, becoming the
Some business ideas fill a real need, but in someenvy of others, knowledge to get ahead in life) or tell
cases the need have to be created throughthem what they lose if they do not order (loss of time
promotional advertising and promotions. Thisand convenience, discounts for ordering before a
information can help build your marketing strategy.deadline).
5. How much competition exists? Remember, there is12. Will you be left with an inventory? Avoid inventory
never a "no competition" situation. You product willrisk; make sure that even you will buy the product. If
always have its competition. Determine the kind ofyou have inventory, consider getting homeowner's or
competition you will have - locally, regionally, andrenter's insurance policy to protect your business
nationally. Look for heavy or moderate competition -against all possible disasters, be it fire, tornado,
the fact that competition exists in that market proveshurricane or earthquake.