Are you pursuing a worthy opportunity or wasting time and energy? We will assist you in analyzing your business, to understand its growth and profit potential.
Focus: market analysis, revenue structures, competitive landscape and contextual factors.
The market analysis consists of finding the total number of potential customers for your service or product (market size) and how much each customer will cost to acquire (customer acquisition costs). Other important factors are customer demo/psychographics, customer lifetime value (LTV), customer retention rates and sales funnel data. Finding this data is one of the biggest challenges for early stage companies. This is where Idea Labs can be especially helpful by compiling internet research, customer surveys, past industry experiences and innovative thinking.
The revenue structure is important to model in an early stage business or project to gauge its potential profitability. The first test is: can you price high enough to cover your variable costs per unit and then make enough units to cover your fixed costs (unit economics). Next you want to figure out how much capital it will cost to launch (start capital), what your working capital will be (balance sheet projections), how much profit it will make over time (P&L projections) and how much value you are creating (net present value).
Since financial models are only as good as the assumptions underlying them, Idea Labs Consulting uses either existing customer data or does independent research and testing to enhance confidence in the model’s conclusions.
Once you discover that you have a profitable service or product with enough easily accessible potential customers, then you need to compare your strategy, current market position, and product and service attributes to your competitors’. Our analysis educates you on market gaps to exploit and weaknesses to monitor. We utilize the most popular framework for competitive analysis, Porters Five Forces, combined with internet research and analysis tailored to your specific niche.
Shifts in context can make an unattractive opportunity attractive and vice versa. We review macroeconomic and technological factors and risks and evaluate how they help or hinder the opportunity.