When exploring the feasibility of your business, pretend you are the investor. Actually, it’s not that far from the truth – you are about to invest years of your life, and most likely your net worth, into this risky venture. You want to be sure this is the right opportunity. Among other things, an investor will conduct at least a month of due diligence before making an investment decision. They will ask tough questions, like is the market large enough and growing? Why will customers buy? How big is this financial opportunity? Is this the right management team? How do they think about the product and industry? Ask these tough questions (and many more) of yourself. Does your idea withstand the scrutiny?
If you find this process difficult, find a savvy investor in your area and pitch him. In addition to great feedback, you’ll be able take a step back and see how an investor would look at your business.
Like buying a house, starting a business is a very emotional process, and it’s easy to lose sight of the fundamentals. Looking at your business like an investor will help you get into the proper mindset, so you can evaluate the opportunity dispassionately.