luni, 12 noiembrie 2012

The evaluation


The evaluation
Arriving in the evaluation of business opportunities, the entrepreneur needs to answer some questions:

a) What is the duration of opportunity?

Studies have shown that businesses have a life cycle, usually in the form: start - growth - maturity - decline.
Ideal for business is entering a "window of opportunity" for the life cycle characterized by weak competition, demand exceeds supply sales price and the profit rate higher.

b) What is the market size of the product?

Of course, the market potential must be large enough to justify the initial investment and the commitment of the entrepreneur. A large market requires more investment and means to cover at the same time, many potential competitors. From these points of view, often a niche market (small features, highly individualized) proved to be the most suitable means.

c) The initial investment is required?

The majority of business opportunities require a small initial investment of age.
Opportunities more expensive, but can offer greater benefits and are more attractive to foreign investors, has the opportunity to be an entrepreneur - that, in fact, must live the business - can afford the initial investment required by investors to demonstrate good faith and interest in the business.

d) How risky is the occasion?

The degree of risk is a key criterion for selection. The risk depends on the size of the initial investment opportunity and the time to recover your business or new products and the lack of knowledge of customers and competitors' answers.

e) What is the minimum acceptable profit?

Activities estimated future benefits should cover the initial investment, effort and risk-taking. Furthermore, the choice of a particular activity, the entrepreneur abandons another commercial potential (the so-called "opportunity cost"), the loss should return to a point in the selected branch.

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