Evaluate Your Idea
The light bulb has gone off, you know exactly what you want to do for your small business. How can you figure out whether the idea is any good?
Objectively evaluating your own ideas is difficult, and unfortunately, the people we are closest to are more likely to support us than to give us thoughtful constructive criticism. Conducting market research is a great way to determine whether your idea is viable before you invest.
You should be able to identify key information about:
Your industry
Your competitors
Your customers
For more information on market research, see our Beginner's Guide to Business Research.
Once you have done your research, the resources below will help you ask the right questions about the information you’ve gathered and your business idea.
Navigation:
Books to Get You Started
Articles
If you want something a little shorter than a book to start with, you can check out these articles. They will help you ask the right questions about your idea and begin to flesh out the details of your plan.
- How to Test a Business Idea by Mike Kappel (Forbes)
- 10 Ways to Evaluate a New Business Idea (Dummies)
- How to Qualify a Business Idea by Alyssa Gregory (the balance small business)
Evaluation Tools
If you prefer to do an evaluation activity rather than read about it, check out these evaluation tools.
- Evaluate Your Business Idea
This checklist of questions from Small Business BC is a downloadable PDF with space to write your answers. - Idea Evaluation Checklist
A big long checklist of questions from Entrepreneur. No space to write, but easy to copy and paste and then fill in. - The Idea Evaluation Matrix
A matrix from BCIT Entrepreneurial Services that allows you to evaluate multiple ideas against your abilities and resources. - Idea Assessment Worksheet
This tool is from Business Queensland Australia, but it still provides a number of good questions to consider and space to write. This is a web form with a print page option but it doesn’t submit or save your information. Please note that the print option only prints what is visible in the form, so if you have long answers you will want to copy and paste them into another document.
Strategic Analysis Tools
These tools work by using a matrix to encourage you to think of potential internal and external factors that could affect your business.
SWOT
A SWOT analysis involves analyzing the Strengths, Weakness, Opportunities, and Threats for your business or idea. The articles and tools in this section will help you ask the right questions to create a useful SWOT.
- How to Conduct a SWOT Analysis for Your Small Business (the balance small business)
- SWOT Analysis Examples (Bplans)
- SWOT Analysis (QuickMBA)
- Xtensio - TWOS Matrix Template
PEST
A PEST analysis takes a more global strategic perspective, examining factors such as the Political, Economic, Social, and Technological climate your business will need to navigate. The more expanded version, the PESTLE, includes all of the above factors but adds on Legal and Environmental. Those are a great addition for any businesses considering a green business model.
- PEST Analysis (MindTools)
- What is a PESTLE? (ThinkBusiness)
- Why Every Business Needs a PESTLE Analysis (Tweak Your Biz)
- PEST Analysis (QuickMBA)
For more innovative tools to analyze your business or business idea, check out the resources on our Lean Startup Launch page and/or our Business Plans page.