Five Diagnostic Questions - Is my Idea Feasible?


1. WHAT PROBLEM ARE YOU SOLVING?

All businesses exist to provide products or services to other businesses or individuals who want to purchase or rent them.

These wants can either be must haves, such as a painkiller when you have a migraine or like to haves, such as vitamins to keep you healthy.

These wants come from 3 basic economic forces:

  • Natural
  • Created (usually by advertising)
  • Legislated (regulation)

To effectively plan, you must understand the nature of both your business and the need(s) that it meets.

2. HOW ARE YOU BETTER, CHEAPER, AND/OR FASTER THAN OTHER SOLUTIONS TO THE PROBLEM?

All businesses have competition. If you think you do not have any – you have not thought about your product or service in the right way or done enough research.

In order to survive and thrive, a business MUST have a sustainable competitive advantage.

Most, if not all, advantages can be categorized as one of the following:

  • Better (more features or functions)
  • Cheaper (less expensive)
  • Faster (less time)

To effectively plan, you must know your competition, your strengths and their weaknesses.

3. HOW CAN YOU PROTECT YOUR IDEA, PRODUCT, OR SERVICE?

All businesses can improve the sustainability of their competitive advantage by building legal barriers to entry in order to protect their customer base, products, services, and profit margins from competitive pressures.

There are a number of means used to build these barriers, including:

  • Patent (long life, expensive to get)
  • Trademark (including look and feel)
  • Copyright (words, sounds, and images)
  • Trade Secret (almost anything)
  • Being the First to Market

To effectively plan, you must understand what barriers can be built and take the appropriate steps to build them. Note: Many barriers have strict time deadlines associated with them!

4. HOW DO YOU WANT TO MAKE MONEY FROM THIS IDEA?

You do not have to start a business in order to make money from your idea – there are many ways to capitalize upon your ideas.

  • License (rent your idea)
  • Sell (your idea)
  • Build it (to sell or to keep)

If the choice is to build a business, you must be able to describe the revenue or business model.

Especially if there are several founders of the business, it is imperative that all the key players discuss this and make sure they agree on the ultimate business goal.

To effectively plan, you must ensure that business and personal goals are aligned.

5. WHAT RESOURCES DO YOU NEED TO IMPLEMENT YOUR PLAN AND HOW DO YOU GET THEM?

All businesses need the following resources:

  • People (Identify key individuals as well as general staffing needs)
  • Money (Identify how much you need, what Color Of Money, and when you need it)
  • Time (Identify how long it will take – and then double it!)

To effectively plan, you need to know what resources you need and when you need them.