Do I have a profitable business idea?
Starting and running a business takes a lot of time and money. Before you spend several hours writing a fully fleshed out business plan or thousands of dollars on startup expenses, you want to do some preliminary research on the viability of your business idea.
First of all, you want evaluate the market viability for businesses in your product or service category. If there are significant barriers to entry in your industry or if technology has radically changed the demand for your product or service, you may need to pivot or reevaluate your business strategy. A great way to do this is to use the Porter Five Forces analysis of your industry and a SWOT analysis of one of your major competitors. Both of these analyses are illustrated on the right with links to our pertinent resources. If you are having a hard time identifying your industry, refer to our How to Research Your Industry guide, and if you are having trouble determining who your competitors are refer to our How to Research Your Competitors guide.
Secondly, you want to differentiate your product or service from your competitors. A great way to come up with new ideas for your products or services is to use brainstorming exercises such as SCAMPER.
Differentiating Your Product or Service
When you going into business, it is important to make sure that you stand out from your competition. Brainstorming techniques like SCAMPER are a great way to come up with new ideas for products and services for your business. SCAMPER stands for Substitute, Combine, Adapt, Modify, Put to another use, Eliminate, and Reverse. The video below uses Smarties as an example of how you can apply this technique to developing new products.
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Porter Five Forces