This is a guest post by Tim Berry, GBR Editorial Review Board member and President of Palo Alto Software
Ideas are a dime a dozen. Opportunities are much more important. An opportunity is an idea that’s passed the test of planning. It has potential. You can implement it. An opportunity has some of the following elements:
- Industry and market potential: look at market structure, industry structure, growth rate, margins, costs, etc.
- Economics: capital requirements, fixed costs, cash flow, return on investment, risk.
- Competitive advantage: degree of control, barriers to entry, availability of sufficient resources.
- Management team: people who know the industry, the market, the operations, the logistics, the road to market.
The business planning process is about filtering the opportunities—a precious few, requiring focus, and planning—from the ideas.
Continue reading ‘Ideas vs. Opportunities’
