Characteristics of Good Business Opportunities.
There are many small business opportunities available to entrepreneurs. These range from home business opportunities to franchise opportunities or going for business for sale. But with all these business opportunities, good entrepreneurs know how to sieve them to determine the best business opportunities among others. If you are a budding entrepreneur looking for business ideas for beginners, it is very important that you don’t just rush into any business opportunity no matter how appealing it may sound. It is good that you how to evaluate business opportunities in order not to get your fingers burnt. Below are the factors you need to consider when assessing business opportunities whether franchise opportunities, business for sale or you want to start a business from the scratch.
- Every good business idea must meet a specific need before it can be considered as a business opportunity. Your product or service must be able to solve a particular problem. No matter how good your product or service may sound, if it does not meet any need, it is just a mere fantasy.
- Business ideas can only be considered good business opportunities when you can identify a target market you will be selling the product or service to. I understand that no business idea can meet the needs of everybody. There should be a specific group or class of people that you can identify as your target market.
- Business opportunities should be able to make money for you. Remember you are not running a charitable organization. The main objective of any business concern is to make profits. If your business idea will not make you money, it is not a good business opportunity. You should know the difference between revenue and profit. Business opportunities should not only earn you revenue, they should return profits to you. You can only make profits if your revenue is higher than your expenses. Therefore, you need to get your pricing model right. If you are financing your business ideas with loans, then you need to lay credence on the payback period of the business opportunities.
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- Can you differentiate your business idea from other small businesses that are already in the market? It is true that there is nothing new under the sun. Your business idea may appear the same with other business ideas. You should be able to differentiate your own company. You can be selling the same things with your competitors. However, you can still differentiate your business through good customer service. You should have something that will make customers prefer buying from you. Without any unique selling proposition, your competitors will sniff you out of the market. You also need to consider the number of competitors that you have. Carry out research about them and the quality of their offerings. You cannot afford to offer anything less than what they are currently offering their customers. If you cannot offer better service, you may need to continue searching for other business opportunities.
- Is the market free for all? Any business opportunity that is not having any entry barrier will soon be flooded by many people. Such business ideas may be lucrative at the beginning; it will not be long before the profits or margin will start dwindling. The entry barrier may be large startup capital, specialized skills, certification required to start such a business and so on. There should be something that makes it difficult for people to start the business. Therefore, the challenges you are facing in starting a particular business idea may be an indication that it will be difficult for other people to start too.
- Startup capital. I mentioned that there are many good business opportunities. But money plays a vital role in determining whether the business opportunities are good for you. Franchise opportunities are good but they could be very expensive for someone looking for business ideas for beginners. The best option for such people will be business ideas with low investment or business ideas they can start from scratch.
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- Having identified the need and market for the business idea, you must assess the size of the market. A good business opportunity should have a market that is big enough to accommodate growth and future expansion. The market should also be growing and not saturated or declining. For example, IT is a growing economy with a huge market potential.
- You should be able to have a good share of the market. You can start your business idea as a small business. That does not mean you should remain small forever. You should be able to capture a good size of the market. This can be achieved by having good marketing strategies in place.
- A good business opportunity should also have an exit strategy. This can be by way of putting the business for sale or by listing the company in a Stock Exhange.