Which Business should I select ?

By | January 28, 2019

Which Business should I select ?

Once you decide to go with own enterprise, next target is to identify, which business to be selected ? This is the most crucial step in making the business model a successful one. You have to be very careful in identifying the business / product /service. Before finalising the product, Think about …

  • What is the competition ?

  • What is the profit / profitability ?

  • What is the required capital and skills?

 

Let us discuss about these…

What is the competition ?

This is a very important aspect before finalising the business. By this time you might have decided that where you want to operate? Now, assess the existing players and the level competition that you have to face. When there are good number of competitors, there is a possibility of lower margins which may effect your profitability. Further, you have to raise your standards above those of your competitors. Offering a product ( by you) at a lower price than your competitors may help to penetrate into the market. But, in the longer periods, assess, whether you can continue with lower prices and have profitability. If the price can not be reduced, then you have to take on the competitors by improving product features, services etc. Thus, you have to assess the market competition and accordingly identify the product/ business/ service.

What is the profit / profitability ?

Why are you planning for a business ? Needless to add it is for profit. If it is not for profit and meant for the welfare of some then it would be totally different assessment. When you start a business enterprise with an intention to earn profit. You have the idea and as per your interest you have started the enterprise on your own. Further, needless to add, business with good profitability only will sustain. However, you have to be very careful in judging the profit and sustainability of profit. Also assess whether, there is scope for expansion. All these things are important in finalising the business.

What is the required capital an skill ?

Another important area that you need to give proper though is the ability to raise the required capital and funds. There may be many business ideas which will be sure to succeed. However, all the models may not work for you. Because, one of the major hurdles in converting an idea into a successful business model is the ability to raise capital and funds. To meet the resources one option is to raise capital and other option is to raise financial assistance. Therefore, carefully assess how much you can contribute towards capital and what are the available resources for raising financial assistance.

However, while considering the financial assistance from Banks / Financial institutions, the cost funds should be considered without any exception. The cost of funds plays crucial role in achieving the estimated profitability.

Also, assess whether any special set of skills are required. If any such skills are required, assess the availability of such skilled people and also estimate the cost of hiring such people.

Once if you go through these basic things the foundation for establishing a new enterprise and running the same on profitable lines would be easier.

All the best

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