Step 2. Do I Have A Good Idea?

 

Dick does his research and he discovers that most startups don’t survive past three years.

 

 

He wants to make sure that his idea has a reasonable chance of succeeding in the marketplace before he quits his job and invests his savings. He has Jane’s full support in the new business venture but he doesn’t want to put his family’s financial future in jeopardy.

 

Dick starts collecting data. He finds out as much as he can about his industry and where it is headed. He looks into who might be his potential competitors. He takes a look at his skills and those of the coworkers planning to join him in the startup. He makes an assessment of where they have a skills gap and where they can get help. Dick thinks he can easily outsource the missing skills they need.

 

Dick takes all of the information he has collected so far and he determines how big the potential market for his product might be. He estimates all costs as accurately as possible to determine how much money he will need to invest to cover off everything until product sales bring in cash. He creates projected financial statements for the next three years to see if he stands a reasonable chance of making enough money to justify all of the risk.

 

Dick then answers the questions of the New Venture Template, which is a system designed by Ronald K. Mitchell, to find out the weaknesses in a proposed business. The analysis discovers a few weaknesses but Dick and his coworkers find ways to overcome them.,

 

Dick has completed his research and the business idea is confirmed to stand a reasonable chance of being a success. He discusses the findings with Jane and they both decide that taking a chance on the startup is worth the financial risk. He and his partners now have to figure out how the business will operate day to day by creating a business plan.

 

Click here to move to step 3