14 Business Opportunity Questions To Ask
Learn How To Evaluate Your Business Ideas

ALISO VIEJO, CA, January 5, 2005 – In analyzing your real estate business ideas or opportunities you must be able to test them to determine their validity. All successful ideas must be marketable, which is demonstrated by a tangible community need, and they must have the potential to provide a solid return on your investment of time, mind power and money. 

Opportunity-focused entrepreneurs start with the customer and the market in mind. They analyze the market to determine industry issues, market structure, market size, growth rate, market capacity, attainable market share, cost structure, the core economics, exit strategy issues, time to breakeven point, opportunity costs, and barriers to entry.  Once you determine that the idea is possible given the marketplace and potential demand, think about bringing together the people and resources necessary to make it happen before the window of opportunity closes

14 Questions You Need To Answer:
 
1. What is the need you fill or problem you solve? (Value Proposition)
2. Who are you selling to? (Target Market)
3. How would you make money? (Revenue Model)
4. How will you differentiate your company from what is already out there? (Unique Selling Proposition)
5. What are the barriers to entry?
6. How many competitors do you have and what is their quality of workmanship? (Competitive Analysis)
7. How big is your market in dollars? (Market Size)
8. How fast is the market growing or shrinking? (Market Growth)
9. What percent of the market do you believe you could gain? (Market Share Projection)
10. What type of company would this be? (Sole Proprietorship, Partnership, Corporation)
11. How much would it cost to get your business operational? (Start-Up Costs)
12. Where will the financing come from? (Borrowed money or selling stock)
13. What is your ultimate exit strategy? (Sell or IPO)
14. If you take on investment, how much money do you think your investors will get back in return? (ROI)

Return on Investment (ROI)
One of the most important elements of a business or potential business idea is determining whether or not it is or can be profitable. Ask yourself questions such as:

• Will your revenues be higher than your expenses?
• How long will it take to breakeven and how long before you achieve positive cash flow?
• How long until the company begins to have a cumulative net income? 
• How much money will it take to start-up this venture and keep it running for at least one year?  

What is Your Advantage?
To determine your advantage, examine your cost structure, your necessary component list and the cost elements associated with outsourcing or self manufacture.   Are the barriers to entry such as large competitors, regulations, patents or large capital requirements going to present roadblocks? If there are many barriers to entry, it will be difficult to enter that market. The higher the barriers to entry, the more disadvantaged you will be. Remember that your ideas are really defined as intellectual property. Do you have a proprietary advantage such as a patent or e0xclusive license on what you will be selling or creating?  Have you considered your distribution channels? How will you be selling or marketing your product or service? Will you sell it direct to the consumer, use a wholesaler or perhaps the Internet?  If you can develop a unique distribution channel, it will give you a definite advantage.

Is The Market Ready?
One of the very first things you need to determine is if there is a real need for your product or service. Try to avoid ideas that sound cool but for which there is no real need. Make sure your product or service fills a need or solves a problem. Always examine your target market and determine to whom you are selling.  Consider your pricing structure in context with your target market.  What you will charge?  Is there a high enough markup to make it attractive and still provide a comfortable profit margin.  Remember - pricing can make or break a deal.

Risk vs. Reward
How much risk is associated with the opportunity or idea?  Start by determining how many people do you need on your team, what specific knowledge or expertise is required and  what will it cost?  These directly impact your time to market.  A focus many entrepreneurs lose sight of is whether or not the market wants, needs and or will purchase their product or service.  You cannot accurately measure risk without spending time working through these key issues.    

Mapping Your Plan
The likelihood of success in any new business opportunity or venture is always dependent upon good business planning. Real estate is no exception to the rule.  Without thoughtful and incisive planning a goal will never be achieved … no matter how much effort one puts behind it.  A business plan is the “living” document that guides your path, measures your success and directs your actions.  Today there is a new business planning solution available to agents that logically goes through the steps in necessary to create an annual real estate business plan.  For more details visit www.createaplan.com