Why did the businesses fail to yield their expected profits? There is possibly many reasons running through your brain now, but they are based on circumstances. For instance, the enterprises could have been unsuccessful because of inflation or mismanagement of funds.
How about putting in the assumptions of fair production costs, good management skills, price stability and many other incentives, the reason is dated back to the time of starting the business. Before executing a business idea there are many influential factors that an entrepreneur has to consider;
-Honestly examining his strengths and abilities – This constitutes testing your abilities to be sure that they are purely able to take up the operations of the business. He should also check his financial abilities as well as establishing financial stands by which he will be able to start and operate his business.
-Having complete knowledge of the product or service to be provided – Knowledge of the product would enhance confidence in the business person while explaining to his customers about it. It would also be useful in solving problems that may attack the nature of the product, such as a product becoming stale due to unfair weather conditions. An entrepreneur can gain information about the product from data sources such as business journals, internet or even opt to employ a specialist in the product production to enable him understand the product.
-Evaluating the market of the product or service – Identifying the market trends and consumer patterns of the product. The performance of the product in the market would help predict the performance of the potential business in providing the product. In addition, pay attention to the customer regards of the product. This will help decide how the product has to be produced and provided uniquely with the aim of satisfying needs of the customers.
-Identify the similar businesses that have been successful for a reasonable period of time – Taking time to assess them would give reliable knowledge of; how to run such a business venture successfully, risks involved and ways of managing those risks so as to enable the business proceed perpetually.
-Identify the skills and training required – An individual should have all the skills and experience needed in running the business. In case he lacks any of them he should strive to acquire them. These expertise would contribute to the competence of the business since it is run by a specialized technical manager.
-Assessing the Returns on Investment of the business venture – This is identifying the possible amount of profits of the particular business compared to other business opportunities encountered. In other words comparing its profitability with the other opportunities.
Performing all the above steps basing on a business idea would enable the potential entrepreneur to be assured whether the business would be viable or not viable