Questions that Test an Entrepreneur’s Product Concept
Thorough entrepreneurs test their product ideas before they begin manufacturing. Even if you’re in love with your idea, ask yourself the following test questions, which compel you to look closely at these areas: the product or service; the market it’ll enter; the customers in that market; your finances; and your team.
|Product/Service||What are the features and benefits?|
|What product development tasks must be undertaken, and what is
the time line?
|Is there potential for intellectual property rights?|
|How is the product or service differentiated from others in the
|The Industry||What are the demographics, trends, and life-cycle stage of the
|Are there any barriers to entry?|
|What is the status of technology?|
|What are typical profit margins?|
|The Market/Customers||What are the demographics of the target market?|
|What is the customer profile? Who is the customer?|
|Who are your competitors, and how are you differentiated from
|Which distribution channel alternatives are available, and
which customers will be served by them?
|Finances||What are your start-up capital requirements?|
|What are your working capital requirements?|
|What are your fixed-cost requirements?|
|How long will it take to achieve a positive cash flow?|
|What is the break-even point for the business?|
|Founding Team||What skills and experience does the founding team bring to the
|Are the major functional areas of the venture covered by the
|What is the nature of the gap, and how will it be filled?|