Recently, I was invited over for a meeting over a cup of coffee by a founder and director of one of the leading local pharmaceutical manufacturing companies in the country.
It was my first meeting with him and I didn’t know what to expect.
But since he had spent more than 25 years building and running a pharmaceutical company, I knew I had a lot to learn from him. I embraced the opportunity with the posture of a student so as to extract maximum value out of it.
It was during this particular meeting that I learned of three parameters that you can use to assess the viability of a business idea.
Employing this three-step test will significantly increase the chances of your business idea turning into a successful venture. Here they are:
1. Legal Aspect
All businesses have rules and regulations that guide how they should be conducted.
Some businesses are highly regulated while others are not.
An example of a business that is not highly regulated is a retail business for thrift clothes.
Perhaps, the only license that you may need to run such a business is a permit from the local government.
On the other hand, professional businesses such as retail pharmacies are highly regulated. You will need more than one license to run such a business—your certification and licensing from the regulator.
Before you embark on setting up your business, find out the type of certificates and licenses that you will be required to have.
2. Commercial Aspect
Of course, nobody gets into business with the intention of making losses.
Any sane person getting into business does so with the intention of getting a return on their investment.
As such, interrogating the commercial aspect of your business idea is essential.
What is your business model?
How are you going to make money?
Who is your customer?
How are you going to get them to patronize your business?
Answering correctly these questions will remarkably boost the odds of your idea becoming a success.
3. Technical Aspect
You need to know how operations will be run in your business.
Interrogate the technical aspect of your business to know the resources you need to run your business.
Additionally, the technical assessment of your business will help you come up with a budget for your business idea so that you can cut your coat according to the size of your clothes.
Having said that, I hope that your business idea passes this test of viability.
I wish you a smooth sailing in setting up and running your business.
All the best!