How can you tell if your business idea has potential?

Think you’ve invented the next iPod? Has someone else? Here’s how can you measure the potential success of an idea. Answer these fifteen important questions:

1. Is the idea evolutionary or revolutionary?
   An evolutionary idea presents a serious improvement over existing products. A revolutionary idea changes the game and knocks all current players out of the water. If your service/product is going to succeed, it should fit into one of these categories.
2. Are you creating value?
   You need to.
3. Do people need it?
   Would someone actually buy it? If you have a prototype, how do people respond? Are they willing to part ways with their hard earned cash in exchange for what you are offering?
4. How big are your margins?
   Ideally, you want your margins to exceed 30%. Mediocre margins are between 15 and 30.
5. Can you prevent imitation?
   Patents? Supplier relationships? If anyone can go out and imitate you, there’s a serious problem.
6. Is your product long-term or short-term?
   Make sure you have an accurate assessment of the long-term or short-term viability of your offerings. You can do well with a fad, if it is expectedly so.
7. Are there any substitutes in the marketplace?
   What separates you from the rest?
8. What are the trends in the market?
   You want to be in either a high growth and emerging market, or one that is predictably stable. Low price pressures from commodity markets are very undesirable.
9. Would people buy your product more than once?
   Desirable purchase patterns are frequent and predictable. Think contact lenses.
10. Do you have enough resources?
    You do not want to find yourself in a position where you run out of money. Even the best product can’t make it to market if there’s no cash or financing.
11. What are your sales volumes?
    They better be strong, and run numbers seeing what will happen if you only make half of your estimate.
12. How reliant are you on your suppliers?
    Be careful not to find yourself in a position where your suppliers are in total control.
13. How efficient are you?
    Is waste and inefficiency minimized?
14. Do you have a well-rounded team?
    Industry experience and a wide variety of skill sets are necessary. So are proven results.
15. How passionate are you?
    If you have any reason to hold back, you are going to. Don’t go for it unless you’re all for it.