How to Evaluate Your Business Idea

You have spent some time thinking and dreaming about starting your own business and you finally think you have a good business idea... However, just because you have an original business idea does not mean it is time to quit your job and go all in. Take some time to ask yourself these questions to help you evaluate your business idea before diving in:

1. Do you have enough money to handle startup costs?—A good business idea is going to need some money to get started. One question to ask yourself when you are evaluating your business idea is, "Do I have enough money to handle startup costs?" Of course, you can utilize your savings, get friends or family to invest in your idea or go to the bank and seek out funding with a Small Business Loan, however one thing to keep in mind is that not all businesses make it. Be sure that you have enough money to fund your business and be aware that losing money when starting down the path to entrepreneurship is a real situation that you may find yourself in.
2. What makes your business idea unique?—With all of the business ideas out there, chances are, you will probably realize that there is already a business that either offers the same or very similar products. This does not mean that you should not pursue your business idea, however be sure to take some time to answer the question, "What makes my business idea unique?" Try to come up with ways that your business will stand out from the other similar businesses.
3. Who is your target market?—You will also need to know who your target market is. Know who your potential customers are and how you are going to market to them. The more you know about your possible customers, the more successful your proposed business will be. Another thing to keep in mind is the size of the market and if there is room for another competitor in that space.
4. Who are your competitors?—You'll need to know who your perspective competitors are. It is a good idea not only to consider who your direct competitors are, but your indirect competitors, as well.
5. Are you passionate about your idea?—If you can answer this question with an honest "yes" then you will more than likely be able to establish your business without issue. You must be passionate about your business idea; otherwise, it is going to be difficult to continue moving ahead in any hard times you may experience.