Evaluating Opportunities

Many of us are faced with business opportunities on a regular basis and in our experience, the higher your profile in your profession or industry, the more likely you are to attract these opportunities.

Too many times in my career I have pursued multiple opportunities at the same time, reluctant to say ‘NO’ and spreading my focus too thin. Unsurprisingly, they were mostly unsuccessful, reminding me of the ancient wisdom of Confucius, who said;

“The man who chases two rabbits, catches neither”

Confucius

Of course you would expect a Warren to have a rabbit quote up his sleeve 😉

The challenge as we see it is deciding which opportunities are worth pursuing. Whether you’re considering the ideas for a start-up or you’re looking to expand your current business, it’s essential to have a framework for evaluation. 

Evaluating new opportunities involves testing feasibility, the extent to which the potential proposition is viable and realistic. A first step is to assess the feasibility of the opportunity by becoming aware of the factors that are likely to influence it’s success. These can be broken down into two groups… Internal & external.

Factors internal to the opportunity include:

  • Your knowledge, skills, and capabilities… and those of the team around you.
  • The resources available to you, including people, financial, and technology.
  • Passion and motivation – Even if there is a deficit in knowledge & skills, it’s sometimes possible, to make up for that with passion and persistence. A can-do attitude can overcome a lot of obstacles.

Factors external to the opportunity include:

  • The industry or profession – competitors and any barriers to entry.
  • The market –  knowledge any preferences, values and buying behaviours of your audience. Consider all demographic and psychographic information necessary to position, promote, and price your proposition appropriately.
  • Key relationships – For example, do you have an “in” that can help you leverage the opportunity? What are your relationships with potential investors, partners or customers? 
  • Any relevant social trends? Is it just a fad? Are there any ethical concerns about the opportunity or its effects? Often it is the perception, not the reality that dictates whether an opportunity resonates with your audience.
  • Legal and regulatory considerations that might impact the business operationally. For example laws, policies, procedures, and any regulations pertinent to the industry or profession in which you intend to operate.