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The coronavirus pandemic has caused a surge in entrepreneurship. Since December of 2019, there have been over 9.5 million new businesses formed according to the U.S. census. Some of those founders are first-time founders or are brand new to the entrepreneurial world. If that is you, I advise you to make sure to use your time wisely. The truth is time is a valuable resource. As many business professionals and entrepreneurs push forward new projects and ideas, I beg you do not to be one of the ones to forget to do one of the most important steps: feasibility checking.
A feasibility check is a study of an idea or project that will help determine whether it is viable to move forward. Feasibility checking is critical because if you pursue an idea or project that is not feasibility checked, you have a much higher chance of failure. This isn’t a waste of a few minutes or hours, but months or years. Therefore, it is essential to understand what questions you should ask to do a proper feasibility check for a new idea, this way you can avoid a colossal waste of time and money.
Here are the three questions you should be asking.
1) Is there a market for the idea?
When looking at a new idea, the first and probably most important question to identify is, “Is there a market for it?” This process is called market research, and while you may have mental images of being asked to fill out surveys or provide feedback, that is only one aspect of market research. Market research looks into your industry, customers, solution, product or service, and the delivery of your product or service. While understanding everything about your market is essential, you need to evaluate two key questions during this phase of the feasibility check. They are:
- Who is your market?
- How big is your market?
“Who is your market?” will determine exactly who your customers might be for your idea. This includes identifying “Who would want the idea or solution to your problem?” and “Who is facing the problem that your idea solves?” If you find a group of people who fit that description, you are on your way to a viable idea.
The second question, “How big is your market?” will give you a sense of how many people could want your new idea. If you have an idea to make Fenwick, Connecticut-themed t-shirts, you may have a lot of people from Fenwick interested. However, Fenwick only has a population of 64 people, so your market would not be big enough.
2) Does the market want it now?
This is probably the number one question that entrepreneurs, venture capitalists, and innovators forget to ask. Bill Gross, the founder of Idealab, created an experiment where he surveyed 200 companies and examined their funding, idea, team, business model, and timing. He found that timing accounted for 42 percent of a company’s success. When you think about timing, it makes sense. If you were to start selling typewriters, you might have a few collectors interested, but most people would say you are coming to market too late. Conversely, say a company made a cell phone chip you could inject into your body so you can answer calls with your hands. Some people may be interested, but most people would be hesitant about putting technology inside of their bodies. Knowing your market is ready for an idea is a good indicator of success.
3) Do I have the resources to make my idea happen?
Resources are defined as people, funding, physical product, or anything else you need to make your idea a reality. Understanding what resources you have and what you need will be idea or project-specific. A great example of an idea where you can see that many unique types of resources are required is, “I have an idea for a new innovative rocket ship.” Sure, you need raw material, but you also need talented aerospace engineers, funding, the physical space to build the rocket, permissions to test the rocket, and many more. When looking at an idea, you should identify the resources needed and ask four key questions if you don’t have the resources:
- Can I make it happen on my own?
- Can I get the resources I need to make it happen in-house?
- Can I get the resources to make it happen from an external source?
- Can I find someone who will work with me to make it happen?
If, after analyzing these questions, you realize you can’t receive the appropriate resources realistically, there is a good chance you may need to go back to the drawing board for your idea.
Feasibility checking can save you or your business a countless amount of time and, ultimately, a significant amount of money. It is easy to get excited about a new idea and skip a thorough feasibility analysis. However, if you want to be a company or innovator that can repeatedly come out with successful innovation after successful innovation, feasibility checking is a necessary step to your success.
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