Feasibility testing is designed to reduce uncertainty, but it won't eliminate it. Silver admits his precise-appearing approach may misidentify some winners as losers. One particularly hard-to-evaluate variable is the quality of the entrepreneur and their team. "Look at Apple," Silver says. "Wozniak and Jobs were the least likely people to run a business. It shouldn't have worked. That's where my model fails completely."
The process of examining whether a business idea is a go or a no-go can even introduce the seeds of failure, especially when gathering feedback. The risk is low that someone you show your idea to will steal it, however. "If all you have is an idea, you have nothing," says Wise. "The best idea in the world is worth nothing until you start building it out." He recommends talking to an intellectual property attorney about protecting your idea, but don't fail to test it for fear of having it stolen.
A more realistic risk, according to Wise, is that you will alienate potential customers by showing them an early, flawed design that turns them off. But the biggest risk, at least in the eyes of entrepreneurs, is that their cherished idea will get the thumbs-down from the people who matter most, namely potential buyers, investors and colleagues. But it's a risk you'll have to take.
In the end, feasibility analysis offers a different and perhaps only somewhat more accurate view of a venture's prospects. Tafazzoli, who despite his gun-slinging attitude actually did a fair amount of market research before ordering his first sink--including researching competitors and contacting potential retailers--says no amount of number crunching can completely replace giving it a try. "The greatest risk," he says, "is not taking the risk."
Mark Henricks is Entrepreneur's "Work Force" columnist.
Entrepreneurship can be lonely, and the solitude doesn't get much deeper than in the gap between deciding to start a business and choosing the kind to start. But you can tap a number of resources to help make the task easier and faster.
- Feasibility Analysis Pro by Palo Alto Software is a $40 book and software package that leads you through a feasibility analysis process, resulting in a graded report of your business's feasibility.
- Bizstats.com offers a wide variety of useful business data for free, including rankings of businesses by profitability and industry, and average profit and expense percentages of U.S. small businesses by category.
- Bizminer.com sells $99 in-depth reports designed to help you understand how businesses similar to your planned startup are doing financially.
- ConceptShare is a service that lets you get on-line feedback from others on ideas and designs for new offerings. The service offers a free trial suitable for evaluating many startups.
- Spigit.com lets you post ideas for businesses and have others vote on how successful they could be or how interesting they seem.
- Cambrian House's Idea Wars solicits ideas for online businesses through its site. Users vote on the ones they think should be developed.
- David Silver's Feasibility Calculator (online exclusive)