Scott Kopelchuk Responded on 2/15/2010

The first step is to conduct research and study your idea. It’s better to find problems in the planning stage rather than after you have put your money at risk. You’ll need to conduct research in the following areas:

-What trends are there in your industry? Are they positive or negative?
-What is the general state of your industry? How competitive is it? How hard is it to enter?
-What resources do you have available? What equipment will you have to buy? What staff will you have to hire to fill any gaps that you may have?
-How big is the market? Who are your competitors? What is their market share? Is there an underserved need in the marketplace that you can exploit?
-How much business do you think you can do, given the answers to the above questions?
-How much will it cost you to operate? How much overhead will you have?
-What is the minimum level of activity that will allow you to break even?
-Create projected financial statements for the next three years.
-Calculate your return on investment and your margins. Compare them to industry averages.

If you get the answers to the above questions and complete the financial analysis, you will have a very good idea of whether the business is worth pursuing or not. You will want to a avoid creating a business that is just able to pay you a decent salary because you will be taking more risk and working much harder than at a salaried job. Make sure you get a decent return on capital.

The next step would be the busines

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