Strategies to select a business idea
Choosing the wrong business is the most common mistake committed by the new entrepreneurs. That’s why I brought this article from SME Tool Kit to help in the process of selecting a good business idea.
The following lists 10 strategies for selecting a business idea I think are useful in verifying your choice:
1 Take your time and wait until you find the right business for you. There is no penalty for missing an opportunity.The selection process requires a lot of planning and experience and expertise are critical to success.
2 Do not tackle businesses that may be too much difficulty. It is better to identify a hurdle than try to overcome a too important.
3 Try to identify a business with long-term economic potential. Follow Wayne Gretzky’s advice: “Go to where the ball is going, not to where it is.”
4 A large error may be an error of omission. This means you could lose an opportunity that is right under his nose.
5 Look for a business to grow in existing markets and in the future. Many small retail stores no longer exist because the big stores, we offer more choices to the customer, often at lower prices.
6 Follow the advice of Warren Buffett, Chairman of Berkshire-Hathaway Inc. and the most successful business in the election of United States history: Mr. Buffett looks for businesses that focus on a “consumer monopoly” with binding capacity pricing and predictable growth in the long term. Examples include: See’s Candy’s, Coca-Cola and Gillette Razors. Can you copycat this philosophy in a small scale?
7 Avoid the business of “commodity” whose expertise is based entirely on the price and which must have the lowest cost to survive. As Warren Buffett said, “in a product-oriented company standards, one is as smart as your dumbest competitor.”
8 Most service businesses have pricing ability.
9 Should I go for a business that you do not know when you can bet on a known?
10 If you intend to manufacture a product, consider the pros and cons of contracting out production to a supplier of low cost. In other words, operate a “hollow corporation.” A “hollow corporation” is one that subcontracts manufacturing and packaging.