PPB May 2021

Profitable. Is it profitable? Profit is a huge part of how we sustain current operations and fund new ones. What are the projected profit margins and the cost of goods sold? Demand. Is there a broad demand for this idea? There’s no point in pouring time, energy and resources into something without enough market demand. Is it something people are looking for that fills a need? Cash Flow. Does it perpetuate great cash flow? Money comes in and goes out and should be exchanged as energy and not as a limited resource. Will the idea help you get paid faster? Does it allow for cash in hand? Does it eliminate the need to hunt down your clients to receive payment? Does it provide an immediate cash supply, where payments are collected up front? Will it ensure that there is cash coming in faster than it goes out? Barriers of Entry. Does this idea solve your existing barriers of entry and create new ones within the market? What assets are required to get into the business, such as a factory or manufacturer, cash to invest, experience of workers or partners, patents, technology, buildings, tools and employees? What is needed to run the business? What can you shift to make it more difficult for others to get into the business after you? Of course, there’s always the question of value. It’s important to look at the value any new idea will bring to a business overall, especially when looking at it from a potential-sale perspective. Will the idea raise your enterprise value and/or sell price? Specifically, would the eventual acquisition of your business bring someone a return on their investment, attracting them to buy? Which path would you choose when leveraging your new idea with a patent or as a sale of the business or idea itself? What would make more sense long-term: licensing the idea for a percentage of earnings, or delivering a strategic buy to another company and increasing the combined overall value through the acquisition? Before investing extensive resources in a new, highly profitable business idea, it’s crucial that you’re able to answer the questions above and assess its success and viability. What I’m giving you here is essentially an environment to help you form your own think tank, either on your own, with partners, or with your employees and active brainstorming teams. I asked myself all the same questions in my 20s when I took ownership of our family business. It was so early in my career, yet I was so ready to find the answers. When I did, I managed to re-engineer the company to make the business fit me —my passions, my strengths, my desire to look for gaps in the market and to fill them by helping people and making a lasting impact— instead of molding myself around the existing business. You don’t want your business changing you to fit the way it’s already running. You certainly don’t want it to take on a life of its own, which would force you to be reactive. But when you have the important questions If there’s a gap in themarket and you seewhen, where andhow to fill it, do it . Jump inwith both feet, gain the experience and ride thewave until it has settled. arka38 / doomu / Gemenacom / Shutterstock.com 64 | MAY 2021 | THINK