Got a million-dollar idea? Look at business feasibility before diving in

Every successful venture starts with a promising idea, and you’ve got a great one. You’re ready to take the leap — but how do you know if your idea will float or sink? Asking the right questions can help you understand what it takes to transform a great idea into a qualified opportunity. Ultimately, looking at the feasibility can help you find out if it’s worth investing your time and money.

Ready to see how your business idea measures up? Consider the following aspects of your plan to see if you’re ready to dive in.

Market conditions

Spend time learning about the industry and current market for the product or service. Be sure to identify potential customers and competitors.

• Is there demand for my product or service?
• Who are my potential customers?
• Who are my competitors?
• Does my business idea fill a need that’s not already met?
• How do I plan to sell to customers?
• What is unique about the business or selling proposition?
• What are the challenges of entering this market?

Technical issues

Get specific about the logistics of your operation -- including how you will deliver the products and services, as well as the tools and technology required.

• Where will my business be located?
• What materials and labor are needed?
• How will I handle transportation or shipping?
• What equipment, technology or tools do I need?

Financial realities

Find out if you have the framework and resources in place to make your business idea financially viable.

• How much money do I need to launch it?
• What price would I charge for the product or service?
• What is my sales forecast?
• How much would it cost to run the business (fixed and variable expenses)?
• Do I plan to invest my own savings into the business?
• Will I apply for a business loan to help with startup or operational costs?
• Will I explore other ways to raise capital, such as reaching out to investors?

Legal and regulatory matters

Be sure to investigate any legal and regulatory issues that could affect your feasibility evaluation.

• How should the business entity be structured (sole proprietorship, nonprofit organization, partnership, LLC)?
• What regulatory requirements exist for the industry or products or services?
• Do I need a patent or protection for intellectual property?

Compile your findings to create a feasibility study. If you’re confident about moving forward with your plan, share it with other stakeholders. Having this documentation and a business plan will help make your case to investors, lenders and other stakeholders.

Financing a startup

If you need a business loan or line of credit to get started, talk to a business banker at California Bank & Trust. We can help connect you with SBA loans and other small-business financing options. Contact us at (800) 355-0507 or visit a branch near you.[cite::171::cite] [cite::172::cite]