But, this is a simple problem. You can choose a business idea with the largest business potential energy within it. Yes, this will be a simple process if we know what business ideas have largest energy.
So, now one of the most important question is how you can measure business potential energy stored into business ideas being analyzed?
Business Potential Energy Metrics Related to Business Ideas
First of all, when we want to accomplish some type of measurement, we must decide or determine metrics for that process. The most important metrics related to business ideas are following metrics:
- The importance of the problems that business idea will solve. Every business idea must solve some type of problem that exist on the market. Because of that, if the problem is more important for potential customers, than the business idea will have larger business potential energy.
- Your entrepreneurial skills to implement that business idea. Without skills, you cannot succeed in the implementation of your business idea even your business idea solves an important problem in the market. Why you will start something that you still don’t have skills, knowledge and experience to implement it? If you have appropriate skills to implement your business idea then that business idea will have larger business potential energy.
- Market dimension. Another important metric for a business idea is a dimension of the market. If your business idea is designed to solve problems of the market with 100.000 individuals, then that business idea will have more business potential energy than a business idea for the market with 50.000 potential customers.
- Competition. As a fourth important metric related to business idea is competition. Is there big, medium or low competition on the market? You must answer to this question. If there is lower competition than the business idea will have larger business potential energy from business ideas that are designed for a market with bigger competition.
Example Using Business Potential Energy in the Selection Process
Now, when you know the basic metrics you can start with measurement. In the table below you can see an example of measuring two different business ideas.
|Business Idea 1||Business Idea 2|
|Importance of the Problem||Big||Average|
From these two business ideas, you will choose Business Idea 1 because it solves bigger market problems and have smaller competition from business idea 2.
Because these four metrics have an influence on the business potential energy of business ideas, you can succeed in measuring the business potential energy only when you convert these words with numbers. This technique rang business potential energy in a span greater or equal to 0 and lower or equal to 1. So, you must evaluate these metrics with numbers in this span. Here are metrics you can use:
Now let’s find the business potential energy of our example with two business ideas:
|Business Idea 1||Business Idea 2|
|Importance of the problem||1.0||0.5|
|Business Potential Energy||3.5/4 = 0.875||2/4 = 0.5|
As you can see I divide the aggregate of the metrics by 4. This number present number of metrics that we used to calculate business potential energy of the business ideas. If you have 10 business ideas do the calculations for all 10 business ideas and choose one with the largest business potential energy. This will be a very good starting point for your new business.