Like other entrepreneurs, you think you have a great new idea for a business or a unique product that will be a best-seller. With the uncertainties of the market place, how do you decide if you should move ahead with your idea? Basically, there are three important steps to take that will assist you in making this critical business decision.

Small Business Decision Tree

Step 1. Set Realistic Expectations

The first step is to weigh your goals against your current resources so that you are setting reasonable expectations for a new business or product launch. Knowing your financial limitations is an obvious point, but it is just as important to assess your personal limitations. For example, you may have a solid savings account and the financial support of family and friends, but you are currently working 60 hours each week. Will your current work situation allow you the time and energy to develop a new business? On the other hand, you may have the time to develop an idea but have fewer tangible resources to use. As you think about starting a new business, weighing all of your resources against the potential outcomes of the business is vital.

One way to visualize your goal(s) is to think about where you would like to be with your business when it is fully operational. If your goal is to have your business serve as your full-time source of support, you can quickly estimate the desired financial goals for the business based on your current cost of living. If, on the other hand, you are thinking of your business as a supplement to your current employment, weighing how much time you have to put into the business versus how much the business will cost to run will also help you develop realistic expectations. In short, clarifying what you hope to accomplish with your new business is one key to deciding whether to move ahead.

Please come back tomorrow to read Step 2.