- Does the potential buyer have a “busted pipe” level problem that they want to pay to have solved now?
- Do they already buy this type of solution or does it require them to change their normal way of doing things?
- Are they able and willing to spend the money to have the problem solved for them?
- Is the market growing by 10-20% year over year?
- Do you have an unfair advantage in acquiring new clients over the competition?
- Is there a recurring revenue aspect naturally baked into the concept (SaaS, Membership, repeat reorders, etc?)
- Are there companies selling non-competitive products & services to these clients?
- Another important question to think about is, can this business generate cashflow soon without a considerable amount of capital or does it require an injection of capital to get it off the ground.
Ending Notes:
Over the last 25 years, I’ve found that if you have good answers to these 8 questions you are likely in a really good spot. On the flip side if you don’t have a good answer to any single one of these questions you could be on shaky ground.