Testing your business idea will give you a better understanding of whether it will work and serve the purpose you intend it to. This section outlines what you should do to understand if your business idea is viable.
What is a viable business?
To understand if your business idea is viable, you will create a feasibility study. We look at this in the next section.
A viable co-operative business is a trading enterprise – it operates as a business. To understand if your business will work, you should answer these questions:
- What is your product or service?
- How will you deliver it?
- Why will people want it?
- Who else is already doing it?
- How will being a co-operative form part of your unique selling point (USP).
- How much will you sell your product or service for? Getting this wrong and selling too cheap is one of the main reasons for start-up failure.
- How much of your product or service do you need to sell to ‘break even’?
- Do you have everything you need to deliver it?
To answer the questions above you will need to undertake market research. The output of this in turn becomes your marketing plan. This will become an important part of your business plan – in step 4, but don't jump ahead! You will create this later.
Right now, you should start to collate other information such as:
- Where is your business based?
- What equipment do you need?
- What supplier(s) will you use?
- What staff requirements will you have?
- How much money will you need upfront to get started?