Have a new business idea? Is there something you have dreamt about creating, or a service you believe you can provide that doesn’t currently exist?
It’s an exciting prospect to start or create your own business…to work for yourself and become your own boss! How do you get it started? How can you know it’s going to work? What can you do to make sure it is a success?
It’s important to first test out whether your idea for the product or service is feasible. A structured feasibility check is the logical first test. It doesn’t have to be difficult, but it is an important step. A feasibility test will highlight major areas you need to consider, including some potential risks.
The first step is the business idea. The second step is getting a clear understanding of what is involved in reaching your goals and determining how you’re going to get there.
We’ve listed a step-by-step 9 point feasibility test to check whether your idea will make enough money to cover your costs and make a profit.
1. Brand Development – Creating a Unique, Strong Brand
Identifying and creating a strong, distinctive brand is critical. In order to ensure your unique brand name does not conflict with any existing brands, you’ll need verify this by checking with the Intellectual Property Office of New Zealand (IPONZ) and the NZ Companies Office.
2. Create a Comprehensive Business Plan
A business plan helps you lay out your vision, organise your ideas and state your business goals in a clear and detailed manner. It also allows you to make sure you have all your bases covered in detail on paper. It will also improve your chances of success. As your business grows and evolves, so should your plan. It is a comprehensive document that grows with your business.
3. Know What Makes You and Your Product/service Unique — and Capitalise on It
Understand and communicate the things that make your business stand out from your competitors and shine a spotlight on those features. Highlighting these features will differentiate your company and give you a competitive advantage. Make these features the centre of your marketing campaign and promote these differences.
4. Budget for Recurring Business Costs
It’s critical you have an intimate understanding of your business costs. Create a detailed budget, review different options of fixed and variable costs, revisit and analyse these recurring costs, and seek additional feedback and advice from other businesses. Detailed cost budgets take considerable time and money, but is critical to monitoring your overall costs, to save you time and money in the future.
5. Measure and Monitor Demand
Through research and analysis, you can identify which segments of the market respond most positively to your products/services. By researching the customers purchasing habits you can gain an understanding of why your offering appeals to them more than others. Once you understand this, you can focus in on these types of customers.
6. Competitive Advantage
Competitor analysis is essential to your business success. Understanding what your competitors have to offer, and what makes you superior, will help set yourself apart from the rest. It’s also important to know what they offer, their strengths, their weaknesses and their pricing.
7. Develop Your Profit Forecast
Develop an in-depth financial forecast – the more detailed the better. Define your market value, estimate your market share and analyse your pricing structure to ensure a workable profit margin.
8. Think About Up-skilling
Understanding your business strengths and weaknesses, helps you focus on the feasibility of your business. Conduct an open discussion with other industry professionals about what skills and qualifications they have and look at areas where you may be lacking for opportunities to increase your skills.
9. Understand and Adhere to Compliance Standards to Improve Feasibility
Understand the compliance standards for your type of business by researching your obligations on Business.govt.nz. You can then contact relevant agencies and industry bodies who can help guide you through the process to ensure you are following the established compliance standards, as required.
This 9 step process will help you review key areas in detail, so you can set yourself up for success.
No matter what type of business you are embarking upon, it’s important to test your idea and see if its feasible.
In addition to focusing on feasibility, it’s important to identify and maintain suitable business insurance for your company. Quotes for insurance can be obtained from a range of sources. You can contact the insurance companies directly, however this generally involves a lot of running around if you want to compare quotes from a variety of insurers.
BizCover NZ has access to a network of insurance companies and can quickly provide you with policy options to secure the most suitable insurance for your business.