In many aspects of business today, it is good advice to plan with the end in mind. That also applies to starting your business, and why a professional feasibility study can identify if the end you have in mind is realistic … and viable.
A basic example: Let’s say you have an idea for a product that fills a niche currently under-served or non-existent in the consumer world. Your goal is to start the business, establish the product in the market, grow sales volume, and eventually sell the business off to a major company at a $500 million dollar or higher price point.
Seems like a great idea until you’ve invested thousands of your own money, borrowed as much as you can, and guaranteed thousands more, only to discover that some other company beat you to market, sold “your” invention to the corporation you were thinking might buy yours, and already has the lion’s share of the consumer market locked up.
You’re forced to find alternative markets, retool a different product (if you can), changing your “end result” objective, or filing for bankruptcy. You may have wasted your life’s savings and possibly those of other family members as well.
A feasibility study can provide you with the research and the perspective, along with the financial data to avoid such disasters. When you engage a professional firm such as Brand Irons to conduct a feasibility study, it is important to share your end result up front.
Knowing that your objective is to serve a need is critical to establishing a viable business model. However, knowing what you want as the end result is the element that provides you with the driving motivation to build your business.
One of the most vital, and often discouraging, revelations identified in a feasibility study is the learning that the business concept has only a marginal commercial viability. This is discouraging because it often crushes the dream of someone’s idea. It is also vital in that it dissects and reveals the inherent flaws in the concept.
An example: A client wanted to create and build an elite level indoor skateboard park in a large city’s suburbs. The rent for the space requirements, the cost to build the custom-designed facility, and the operational expenses were all upper end. What the feasibility study revealed was the inherent flaw: Skateboarding enthusiasts prefer to be outdoors when they can and they don’t like to spend money to skate!
More on this later, but consider a feasibility study for your business idea. Whether it’s for starting up a new venture or expanding an existing one, take the time to think things through. If it’s a good, viable idea today, it should still be feasible in a month or two.