Everyone wants to see their business grow and thrive. While there are many ways to make this happen, one of the best is to become skilled in not only recognizing opportunities for your business to grow, but determining whether those opportunities are right for your company. The fact is, not all opportunities are good ones – or at least, good for your business.
The question then becomes, “How can I tell if I should go after an opportunity, or pass on it in favor of something better?” While your individual circumstances are going to be a major factor in answering that question, there are a few points to consider that will provide you with an objective answer that will ensure the success of your enterprise.
1. Do You Have the Necessary Resources?
An opportunity might seem like it’s ideal for your business, but before you jump in, consider whether you have the resources – money, time, staff, talent – to make the most of it. While it’s certainly possible to acquire the resources you need once you’re underway, you need to have a plan for doing so from the very start. This could mean opening a small-business line of credit to tap into, for example, or creating a plan to train your existing staff for new functions.
In some cases, it may become clear that you don’t actually have the resources you need for the opportunity, and the cost of acquiring those resources will negate any growth you might see. In that case, an opportunity isn’t right for your business at that time.
2. What Will the Impact on Spending Be?
When evaluating an opportunity, you need to consider what the effect on your customers’ spending will be, in addition to the potential to open new markets. In other words, is the opportunity actually going to attract new customers, or is it just going to lead existing customers to shift their spending from your current products to the new one?
3. What Needs Will the Opportunity Fulfill?
In addition to considering the impact on consumer spending, you need to think about the needs that the opportunity will fill. Is it something that will actually meet your customers’ needs? That doesn’t mean that if your customers haven’t asked for something, they won’t be interested. Think about what Harvard Business Review calls “compensating behaviors.” Even if your customers aren’t demanding a product, or spending money on something else, they may be doing things to fill that need. If you can provide a better, more efficient or cost-effective way for them to accomplish the same thing, then they are more likely to be interested in your product.
4. What’s the Shelf Life of the Opportunity?
Nothing lasts forever – and that includes business opportunities. When evaluating new ideas, look beyond immediate trends and customer needs to determine what is happening on the horizon. Is the market likely to be saturated in a year or two? Will customers have moved on to something new? Is the opportunity based on outside forces in the economy that are likely to change considerably in the short term? Just because an opportunity has a short shelf life does not mean that it’s not worth pursuing, but you need to have a plan to work fast and take advantage of conditions while they are favorable – as well an exit strategy.
5. What Are the Barriers to the Opportunity?
Any time you hear that an opportunity is a “sure thing,” you need to run in the opposite direction. Nothing is ever guaranteed, and there will always be barriers to success. Before you pursue anything, spend some time identifying the possible barriers to success and how you will overcome them. Consider whether you are creating unnecessary barriers by buying into perceptions that aren’t necessarily based in fact, and ignore those obstacles that are merely a matter of perception.
No matter how great an opportunity may seem, there will always be challenges to growing and expanding your business. However, by taking the time to carefully evaluate those opportunities that come your way, and making educated decisions, you will minimize those challenges and increase the likelihood of success.