Supporting Materials from Michael Kaplan - Circle FIVE
Thank you for your continued interest in the "Evaluating Opportunities" program sponsored by Circle Five. What follows is additional materials you may find useful.
Four Areas for Assessment
1. THE PEOPLE behind the idea and experience of the entrepreneur, the management team, employees, and advisers. Even a great idea with high market potential requires an entrepreneur that can effectively (and passionately) support and grow the idea.
Do you have the competence to turn the idea into a business?
2. THE RESOURCES available including the equity and debt sources of capital that are accessible, assistance from experts, and the technology required to support the idea. What relationships can you rely on to acquire the necessary resources?
3. THE KNOWLEDGE and information possessed by the entrepreneur, including the venture concept, the industry, and market research. What needs to be known for the new venture to be successful? Information about competitors? About customers’ preferences?
How will this information be obtained?
4 THE IDEA's ABILITY TO GENERATE REVENUE. How great is the potential to sell something that will generate actual revenues? One of the mistakes would-be entrepreneurs make is to assume that everyone will love the idea and that people will be standing in line to buy it, once the business opens.
How can you manage costs while maximizing returns?
Business Evaluation Scoring Technique (BEST)
The Business Evaluation Scoring Technique (BEST) was developed to help entrepreneurs evaluate a group of ideas before deciding which ones to pursue. The tool considers the various “windows of opportunity” related to new ventures.
Answer the following questions on a 1–5 scale: 1 = low and 5 = high.
1. Is the business really differentiated from other similar businesses?
2. Does the business have growth potential?
3. Will the business require capital? (Note: A low dollar requirement receives a higher score, while a high dollar requirement should receive a low score)
4. Can financing be secured?
5. Does the business suit the individual’s entrepreneurial profile (e.g., mind-set, experience)?
Total Score | Description | Action
20–25 | Excellent prospects | Must try
15–19 | Very good prospects | Should try
11–14 | Reasonable prospects | Try if nothing else is available
10 and under | Poor prospects | Avoid this mistake