In the previous post we shared how we are going about finding the right spot for PeanieSutra. When we have a location, we need a business concept. After all, the right location without a business ain’t gonna give us the lifestyle we are looking for.
In this post we will describe the approach we are using to hone in on the right concept. Our business concepts include:
- A Lounge Bar
- A Fitness and Water Sport Centre
- A Boutique Hotel / Resort
- Write Travel Reports (Articles and Photography)
- A combination of any of the above
To select the final business concept, we are undertaking two sequential analysis phases. The first to prioritise the concept, and the second to use market data to select the final concept.
To prioritise the business concepts, we attempt to score each concept based on our and its “capability” by using four criteria. These are:
- Our Own Competencies to succeed
- The Investment required: initial and ongoing
- The Life Cycle of the concept
- Can it provide the Life Style we require?
To prioritise the concept based on these criteria we adopt a similar approach as with identifying the right location. We:
- Weight each of the 9 criteria. That is, not all criteria are equal, so a 100 points is distributed across the 9 criteria.
- Score each concept against each criteria on a scale of 1-10, where 10 = highest.
- Give a confidence level for the quality of the estimation given to each criteria. 100 = 100% confident that the data is correct.
- The number for the three points are multiplied (1 x 2 x 3 = index score) and tallied up.
The concept with the higher scores are taken through the the final phase to select the best one
This we do by determining the “attractiveness” of the top business concepts. To do so, we gather data and information on the following two criteria by selected location.
- Size of the Market Demand
- Competitive Activity
- Our Competitive Advantage (value proposition)
Once the facts are ascertained, we follow much the same approach as with selecting a location and prioritising concept. That is, we weight the selection criteria, rate our confidence on the data gathered, and score each concept by location against the criteria.
Once we complete the analysis we will post the results.
Tell us … So what do you think of our approach published in this and the previous posts on how we are going about to identify a location and final business concept?
Many of you have asked what we busy with at the moment.
As you can image, to launch a new venture in a foreign country requires extra research. Currently we have an idea. This idea is very much driven by passion and a vision … two absolutely key ingredients to the eventual success of anything, new of old.
However, we are two practical individuals with extensive business experience, so we know we need to test the viability of this idea. How do we approach this?
We have what is called a Real-Win-Worth analysis. This means, we gather facts and data to verify the:
- reality of the concept. That is, is it realistic?
- our ability to win with this idea. That is, can we pull it through?
- will it deliver the results we want. That is, is it all worth it?
The primary purpose of this process is to prioritise a location and make a final decision on what and where.
Right now we have commenced the long process of gathering data and facts in order to conduct the analysis. This process has two main phases:
- Desk research on macro information to identify potential locations.
- Location visit to verify facts and gather additional in-depth information.
You may be asking, “So what are some the evaluation criteria we will be using?” And I would respond, “That is a brilliant question, and here are our current thought. These are the questions we are asking and looking to find answers”.
- Is there a need, want, or problem to solve ?
- Is there a set of customers able and willing to buy ?
- Is the targeted market SIZE attractive (e.g. tourist numbers, etc)?
- Is the targeted market GROWTH attractive (e.g. economic, visitors etc)?
- Is the targeted market TREND attractive (e.g. accommodation, entertainment, food and beverage trends)?
- Are there any regulatory or legal barriers to entering the market (also as a non citizen)?
- Are there any consumable supply chain issues?
- Do we obtain the right assets to maintain the business (e.g. people, equipment, space, time)?
- Political, economic and social stability (including cultural practices)?
- Can our offer be competitive on value, service, and concept?
- Can we leverage our intangible assets (e.g. knowledge, relationships, strengths)?
- Marketing, promotion or communication needs for success?
- Can our business model win vs. our competition?
- Do we have access to the necessary capabilities/ resources to execute (internal: people, capital, equipment, expertise, etc.)?
- Will we be able to live the lifestyle we desire!?
- What will it cost to succeed?
- Is the profitability adequate?
But I would immediately add that this where we can do with your input. Tell us what you think.
What else should we consider, eliminate or change?