By Andrew Wong

In my line of work as an incubator manager, I received a lot of questions about how to start a business. Aside from telling them to start with what they have – who you are, what you know and who you know – there are certain points in which they will have to evaluate first before they proceed to start a business. Here is a 13-Point Checklist on what you should do to evaluate the feasibility of a business before you start. Let’s take a look at each of them.

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strong>1. Validating the idea

Before embarking further on the idea of your business, there are 4 decision points which you will have to evaluate before making a decision. The 4 decision points are:

1. Is this idea feasible? Think from the perspective of the market, economic, social, regulatory, technology, trends and more. 
2. Is the idea financially sound? Does it make money? How much money will depend on how much you aim to make. Some entrepreneurs aim high, some aim low. Important is that the idea makes money. 
3. Do I have the resources to turn this idea into a reality? Think about who you are, what you know and who you know. If you don't have the resources, can you leverage on others?
4. Do I want to do this? This question covers the area of passion. Are you passionate about this business idea? Will you get up every morning feeling bogged down and stressed if the business is not going as smooth as you want to? /span>/span>/span>/span>

span style="text-decoration: underline;">2. TAM

How big is your market opportunity? This determines your financing and go-to-market strategy in a significant way. Do you know how big is your market? How do you extrapolate your total available market?

strong>Have you gone out to the market and talked to strangers to validate your idea? Try talking to 100 people who are strangers to you. Family and friends do not count. Do you know who are your potential customers? Do you know their buying behaviour? Do you know what will be their unique buying reason? What is their deepest pain that you can solve with your solution? What is their emotions when they buy? Is the business validated with potential customers?  Do your potential customers get excited at your product and want it right away and willing to pay a price for it? If you don’t have it, then it is not validated. 

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strong>4. Think about your Mission and Vision

Here we teach our entrepreneurs to think Mission as Purpose and Vision is the Big Hairy Audacious Goal (BHAG) of achieving the purpose. Goals, as usual, must be SMART - Specific, Measurable, Accountable, Relevant and Time-bound. Every business should have a clear purpose. The purpose is not your personal purpose. The company must have its own purpose, its reason to exist. If Purpose is clearly defined and resonates very well with your stakeholders, you will have greater buy-ins from your staff, suppliers, partners, investors and funders. And a clear vision articulates what will be the BHAG for the purpose. 

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strong>5. Positioning

Are you able to articulate the precise positioning of your product and services offering? Do you know how to position it in the minds of your customers? What are the values they are buying into? This is where you need to craft out your customer value proposition and validate the positioning before you start.

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strong>6. Product Structure

The product structure is very important. People buy values, not products. Products are the manifestations of values. One has to understand that when crafting out your product structure, one has to consider the values that they are selling to their customers. 

The product structure can be divided into 5 product drivers - Signature, Support, Basic, Service and Fill-in. Do you have signature and support products? These product categories usually fetch the highest profit margin, whereas, basic, service and fill-in gives you the least profit margin and you will have to sell in volume. 

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strong>7. Monetization

strong>Free is NOT a business model. How do you monetize? Do you have a monetization strategy? Have you validated your monetization strategy?

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strong>8. Business Model

Understand your business model. How do you make money? Use the business model canvas to design your business model.

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strong style="font-size: small;">9. Marketing Strategy

What will be your marketing strategy? How do you define your customer journey map? This is where we will introduce the marketing canvas to determine your marketing action plan. 

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strong style="font-size: small;">10. Customer Acquisition:

 What is your customer acquisition strategy, cost, conversion rate, channels, channel costs? How do you plan to acquire your customers?

Have you done enough bootstrapping before approaching investors? Is your company fundable, or is it one that needs to be bootstrapped all the way? 99% of entrepreneurs bootstrap their businesses for at least a year before they approach investors. Bootstrapping is also useful to validate your business model first before looking for investors.

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strong>13. Growth Strategy

Every business must have a growth strategy. We don't start a business to survive. We run a business to grow and the business eventually is our own wealth creation asset. We should not be a slave to the business but the business should work for us and generate money for us. Entrepreneurs must know is their strategy to grow the business. Start with a 10-25 year BHAG (Big Hairy Audacious Goal) and work backwards from it. This is what we teach all our entrepreneurs to do so that they have a pathway with a clear direction and goal.