Hi Pat, thank you very much for your question “How would you know if your new businiess is financially feasible.” It’s an interesing question that I am certain in all entreps minds.
From a straight financial perspective, you need to generate more sales than your total expense. Of course, this may not be possible from the first month. However, in time, hopefully in six months you still going cash flow positive.
From a business perspective, we may need to go back to your business model. The primary quesiton to test is will your specific target customer pay for your product or service that solves a problem they have? Is their problem pressing enough for them to go out and pay for a service.
Let us take for instance a pet grooming business. One of a pet parents problem is that they don’t like to have their lovable pets look disheveled and smelling bad. The solution would be to find a trusted groomer for their lovable fur babies. Another problem that comes to mind is trust and peace of mind. Can they trust the groomer with their fur babies. It’s a similar question to parents. Will you trust someone with your child? Do you have peace of mind when leave your child for half an hour with a stylist? Do you trust that your child will look better when you leave the parlor?
Assuming that you have a service that uniquely solves your target customers problems, the next question is that is it scalable? Can your business scale bigger? If your business model does not scale, that’s still not so bad specially if it provides good income. It’s more an income generating hobby or a source of good revenue for you, a solopreneur.
If it is scalable, then the set of questions change. Can you get funding for it’s growth at a later time? Can you maintain the level of service quality and operational excellence that brought you initial success? How much of your shares are you willing to give up in exchange for funding?
I hope that I was able to answer your question Pat. If you have followup questions, please feel free to send your voicemails.
Thank you everyone and stay safe.