Step1
Define your product or service. Be specific in your definition. What exactly will you be offering prospective customers? How will it be produced and/or provided? How will it be delivered to the customer? How much will it cost? What are the options? What is the warranty?
Step2
Describe your customers. Who will buy your product or service? Will your customers be businesses or consumers? Why will they buy from you rather than your competitor(s)?
Step3
Identify your competitors. Learn about their products, services and company. You can get plenty of information from the company through annual reports, financial statements, industry publications/reports and marketing materials. Analyze the competitor's marketing materials. Those materials will tell you what they think are the advantages of their products to the customers. Is your product or service better than that of the competition?
Step4
Define your competitive advantage. What makes your product or service better than your competitors' offering? You can gain a competitive advantage in a multitude of ways. You could offer cheaper prices, better quality, faster service or a longer warranty. Perhaps you have a proprietary technology or method of doing business that provides your business with a competitive advantage. Competitive advantage is only an advantage in the short term. Competitors will see that advantage and act to overcome it. Successful companies continually look for an advantage over their competitors. If you don’t have some advantage, why would prospective customers buy from you?
Step5
Create a projected financial statement. The projected financial statement forces you to think specifically and accurately about the costs of running the business, building the product, selling and delivering the product or service. Without this information, you are going into business without knowing whether the business is even feasible. To be successful, you must be able to sell your product or service at a price that covers the costs directly associated with producing and delivering that product or service to your customers PLUS contribute towards paying other operational costs not to mention providing a profit to the business. The best way to know whether you can make enough money is to create a profit and loss statement projecting or estimating your revenue and expenses. Creating this statement is as simple as calculating projected revenue minus projected expenses. Use actual price quotes whenever possible.
Step6
How will you communicate the availability of your product or service to your prospective customers? Internet advertising, direct mail, outbound telephone calls, radio, television, print advertising, trade shows and outdoor bill boards are all tools a business can use to educate and inform prospective customers about the availability of your product or service. The challenge is to find out which tools are the most efficient and effective in generating interest and sales.
Step7
Describe the things that could go wrong to negatively impact your business. Loss of suppliers, inadequate sales, insufficient profit, product defects, customer dissatisfaction, government regulation and new, better competitors are examples of things that could go wrong. What might go wrong with your business? How will you handle those problems should they arise?
Step8
Decide. After completing these steps, is your business idea sound? Does your product or service have an advantage in the market? How quickly can the competition adapt to your entry to the market? Can you generate enough from sales to cover expenses and earn a profit? If your business idea holds up under this level of scrutiny, go for it.
Novice 
