Knowing whether to pursue a business idea or not is a never-ending challenge for a person. Eric J Dalius says a business idea can seem attractive, but evaluating the practicability of the business idea is essential to reap value.
Can You Protect Your Business Idea?
Determine if you can patent the finished product or the process. Eric J Dalius suggests leveraging a moat that can help in obstructing potential competitors to compete with your business and also achieve a competitive edge over the others. Moats can include exclusive licenses, patents, and also unique information that makes it difficult for the competitor to copy the business. On the other hand, a business can also run well without protection or a patent concept. It solely depends on the type of industry you are entering. If you have your vision towards a specialized industry, such as pharmaceutical, patenting, and licensing, it can go a long way.
What Type of Industry are you Operating in?
Regulations protect stakeholders’ programs. However, they can come up as major barriers to entry for firms. If you are entering a heavily regulated industry, you need to thoroughly check for the regulations beforehand. Moreover, country regulations and policies also matter in the success of a business. Obtaining and complying with regulations can cost a huge pile of dollars, making it extremely difficult for a budding entrepreneur to fuel the same. Innovative products and services also need to comply with the current regulations to sustain the goodwill of society. This is why healthcare sectors lack innovation, as it discourages entrepreneurs from entering a market in which regulations curb profits.
Comparison with the Peers
A comparison of your business model is vital to understand the loopholes. EJ Dalius talks about the two ends of a spectrum that needs careful speculation; one is a blue ocean and also the other red ocean. A blue ocean is where the market is niche and constitutes fewer competitors and also hindrances, whereas a red ocean includes ample players. Compare your business model to others and evaluate the outcome for the opposite party. It is similar to evaluating a case study and concluding the threats and weaknesses of the business model. Analyze the similar loopholes in your business and convert them into your strengths.
Are You in Need of Upfront Costs?
Many businesses need upfront costs, and for a startup with limited funding options, this is an obvious no. Eric Dalius strictly advices to avoid a business idea that requires a large upfront cost. The only excuse is when the upfront cost can act as an investment. However, this needs a lot of market research techniques and also forecasting methodologies to evaluate the success points. The upfront cost is not a bad concept. For best results, you need to understand the risk involved in the market you are entering. Entering a high-risk market with a colossal upfront cost can only attract losses.
Carefully brainstorming the above questions can render you positive results. With proper channel and guidance, a budding entrepreneur can quickly master the art of value creation and also positively impact society.
