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Business Idea Assessment
Business Idea Assessment
Assessment – a measure to evaluate or estimate the nature, quality, ability, extent, or significance of
something which in this case the business idea.
The business idea assessment is sort of a roadmap on where we should go in the world of business and
entrepreneurship.
To narrow own the many ideas that we can come up as our business venture
To evaluate our idea with what is already established in the marketplace
To have focus as to what idea should be developed into a venture
It will give us a bird’s eye view on the ideas we generate
It is wise to assess or test the business first before plunging ourselves in starting a business.
In doing an assessment, questions play a vital role in gathering information. The following are key
questions that every budding entrepreneur should answer and help in narrowing their business idea:
Here’s a schematic procedure as to how we should do in venturing a business. As you may have noticed,
almost two-thirds of the process focuses on idea assessment. Including here is the decision making part,
even in deciding, we must be critical in assessing whether the idea is good to go or not. Everything we
do in business should be precise and accurate.
knowledgeable individuals or experts in the field of the business or market sector you wish to
penetrate. Does your idea make sense? Identify business scenarios or models for further
investigation and eliminate those that are not viable.
Formal investigation – it is in this phase whereby we can conduct a pre-feasibility study or a
marketing study pertaining to the idea and various scenarios or models. This may involve using
consultants to investigate various aspects of the project. It may involve eliminating additional
scenarios or identifying new ones.
Refine scenarios – select those which are viable for further study and eliminate the rest. As you
go through this step, you should have accomplished:
o Reducing the number of scenarios or models under consideration for further study.
o Refine the remaining scenarios / models
Further refine scenarios – this is critical before moving on to the next phase of the business
development process. By now, you should have trimmed down your idea to one or a small
number of a specific and detailed business model that you want to assess.
Conduct feasibility study – a feasibility study can provide a comprehensive and detailed
assessment of the market, operational, technical, managerial, and financial aspects of the
business project.
Analyze the feasibility study – upon finishing or receipt of the feasibility report, determine first
the accuracy and completeness of the report, and not deliberate them immediately. Does it
address concerns that you want to address? Was there a thorough investigation on identified
critical issues? Challenge the assumptions and conclusion of the study. Only after you have
accepted the study as being complete and comprehensive, you can now move to step 3.
However, before proceeding to the said step, you should refine the idea and business model
even further to be sure.
Further refinement of the business idea and scenarios – you began this step with refinement
and end it with refinement. It is common for feasibility studies to uncover new issues that need
to be investigated. You may see the need for further study on the said issues or on various
aspects of the business project. Therefore, you may need additional negotiations with your
consultants to expand the original scope of the study to cover these issues and concerns.
Afterwards, if you completely accept the results of the study an there are no more new
concerns to be addressed, you may proceed to step 3.
Everything we decide to do can make or break a project. Therefore, this step is the most crucial
in the entire business development process. In a way, this is a point of no return. Once you’ve
plunged in the creation of the business, no turning back. If there are unresolved doubts or
reservation about the project, it is wise not to push through with it. So, it is imperative to have
an open, honest and thorough discussion before making the decision.
BUSINESS IDEA ASSESSMENT
There can have a division in the committee; one group will push forward, and the other will say
no. This is common and their opinion is important. You should take an honest look at all angles
and all arguments presented. If the issues cannot be resolved, each side needs to go in their
separate ways with no ill-feelings against each other. At this point, the remaining committee
members should determine on whether they still want to pursue the business venture.
Commitment is a very essential factor to consider before you proceed. Most beginners to
business development greatly underestimate the time and effort required to start a business.
Financial commitment, for example, by committee members at this point is a clear sign of
commitment in the creation of the new business venture.
This step involves one of three possible decisions:
o Decide that the project is viable and move forward with it.
o Decide to do more study and or analyze additional alternatives.
o Decide that the business is not viable and abandon it.
Value Proposition
Competitive Advantage – a way of moving ourselves forward against our business competitors.
In the stage of idea assessment, we should have a statement to describe the competitive edge of our
product and service. This statement is called value proposition. Let us decipher the word and talk about
its definition:
An act of offering something that has worth in usefulness or importance to the processor, utility,
or merit; or
An offering that has a fair return or equivalent in goods and services or money for something
exchanged.
A statement that summarized why a customer should buy the product or use the service – meaning that
this statement should convince potential customer that the product or service that you offer will add
more value or solve the problem better than the other similar offerings.
In summary, a value proposition is an offer to some entity or target in which they (the possessor) get
more than they give up (merit/utility).
1. Internal Analysis
a. In looking at the value chain (internal logistics > operations > external logistics > sales and
marketing > service), how does your company create value?
b. What are your company’s core competencies and how do you differentiate yourself from
the competition?
c. What capabilities (internal and external – partners, alliances, joint ventures) can you bring
to bear to execute against your value promise?
d. Why should your value targets accept your particular offer?
2. External Analysis
a. How do your value targets quantify (measure) the value that you deliver?
b. How do you link your value proposition to your target’s needs and pains?
c. How do you compare and differentiate the value that you deliver from the value of your
competitors?
d. How do you substantiate your ability to deliver on your value promise?
e. How can you increase the return or decrease the risk, or both, in creating and delivering
higher level of value?