After generating business ideas- it is important that some evaluation through a screening process be made.
The screening process is a systematic evaluation ideas in order to select the best idea which would suit one.
The screening process must be done carefully, objectively, soberly and without any emotions.
The business idea screening is required even when there is only one idea to consider. This is because this is a stage of starting a business that may be not be profitable or may be difficult to run. The screening process must therefore evaluate the following
1.Personal Evaluation
- the objective for going to business
- personal interests
- The degree of commitment to the business or others e.g family.
- Personal Skills
2.The self SWOT analysis – this aims at analyzing ones
- Strengths
- Weaknesses
- Opportunities
- Treats
This will help achieve the desired goals- the
S- Relates to the internal capacity of self or organization
W- Are subjective
O- Relates to the external environment to self or organization
T- Are objective.
The Importance of this Screening Stage include;
- In order to develop a strategic profile.
- To provide a framework to assess the current and future plans
- To act as a control technique when conducted periodically
- To get realization ( reality) on the activities
The SWOT components
Strengths – these are positive internal conditions such as - Distinctive competence
- Adequate finances.
Components of the SWOT Analysis (importance of self evaluation)
The screening process or evaluation helps identify;
1.Strength
- Distinctive competence
- Adequate finances
- Access to economies of scale
- Good innovation ability
- Proven management
2.Weakness
- Lack of key skill
- Internal operations problems
- Low morale
- Poor track records
- Weak internal image
3.Opportunities
- Potential customers
- Potential goodwill
- Health
- A favourable social
4.Threats
- strong competitions
- Adverse government policies
- Political instability
- A designed economy mismanaged economy
- Unfavorable legislation
1.Market evaluations
The aim is to create assurance of adequate market
The main components include
- Consumer demand analysis
- Product price and placements
- No. of competitors in markets.
2.An analysis of availability of raw materials in terms of
- Adequacy
- Reliability
- Price
3.Analysis of providing technology in terms of
- Appropriateness
- Affordability
4.An analysis of skills available
5.Analysis of the government policies.
Characteristics of a Good Business idea.
- Easy to manage and involve minimal risk.
- Does not require excessive capital investments
- Offers a good returns on capital
- The idea has scope for growth, expansion and diversification
- Comparative with owner’s goal and interest
- Not against expectation of the society
- Has a short gestation period
- Has a readily available market
- Easy to exit when necessary.
