Wednesday, January 9, 2008

How To Choose The Optimum Project

This is a continued series from yesterday; (Planning For
Profit... yesterdays Title)

Let's say you have only one product or idea to sell for your home business or Internet income opportunity... than it would not be necessary to organize your projects into any type of priority since you have only one.

Now if you are blessed (or cursed) and you have an abundant
imagination and a number of possible projects, than you would
need to organize those projects by priority.

What you would do is to list each of your potential projects and
note what product you plan to sell and how you plan to promote
it. Would you use direct mail, magazine ads, other ads, put it
in a catalog, or would you use Internet Advertising exclusively?

Suppose you have 10 different projects to work on. You would
assign a number from 1 to 10 to each project under each of the
following categories:

1.Promotion timing-the time required to get the promotion off
the ground. allow time to design and write the advertisement or
sales literature, to prepare the copy, to print, and to mail
(Plus advertising lead times)

2. Product timing-time required to have a finished product.
Allow time for designing, tooling, producing, and shipping. Be
conservative. You might also want to consider how long it will
take to obtain reorders, if that is needed criteria.

3.Capital requirements-how much up-front cash will the project
require? How much for designing, how much for tooling, how much
for ad copy prep work, how much for initial product inventory
and promotion? The higher the capital requirements, of course,
the less desirable the project would be. especially if your
financial resources are limited. Make this category more
objective by assigning concrete values to each number-for
example, 10=$100.00 or less, 9= $101.00 to $300.00,... 1=
$5,000 to $10,000, 0= $10,000 and up-or some other such ranking
which reflects the range of potential capital requirements.

4. Profit potential-how much profit can you expect to earn from
each project? Assign a dollar value to each number from 1 to
10, zero being the lowest and ten the highest. Be realistic in
evaluating the potential profits. Use a cost analysis and profit
formula to determine potential profits for each project.I will
describe and illustrate this for you at a later date in this
series! Hint- Keep coming back!

5.Back end potential-the potential for repeat sales. Will your
customers come back for more? Does the product itself get used
up or wear out so the customer will need to buy more?(e.g.,
vitamins or clothing)? Or, can you develop an appropriate line
of products which can be offered to your customers(e.g., a
catalog of kitchen gadgets or a series of books)? Repeat
customers are the foundation of all businesses.

6.Ease Of Operation- Is it something you can handle? Does it
draw upon your talents and interests? Will it be easy to set
up and continue? If impossible, assign a zero; if you could
do it in your sleep,assign a ten.The more suitable, the
higher the number.

7.Odds of success- the most subjective of the rankings. How
appealing is the product? How large is the customer base?
Will it play in Peoria? The rating here should reflect your
enthusiasm for the product, plus-more important-the results
of any market testing you have done. Zero indicates no chance of
success. Ten indicates that the sky is the limit.

Tomorrow, Other criteria...

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