Lubavitch Real Estate Blog

Is my idea of sustainable business?
To determine if your idea is sustainable you need to ask you some questions:

“I can deliver the product over and over again?

Is there a market for my product? You can determine this by looking at competitors, the existence of competitors shows that there is a demand.

Is the market will buy my product again? Look for industry publications and learn all you can about the buying habits of the target market.

“I can get to have enough market to stay in business year after year?

Is my business idea profitable?
To determine whether your business idea is profitable you have to establish as accurately as possible what it would cost the customer product delivery. It is necessary to identify two major costs:

How much it will cost to manufacture and sell each unit? This is the variable cost of your business.

How much it will cost to operate the business regardless of the level of sales? These are the fixed overheads or your business.

Then, you must estimate the level of sales you expect to make and use it to determine the contribution that each sale has to contribute to overhead. Then you can determine whether your business idea is profitable or not by the deduction of variable costs and contribution to general expenses of the sale price. In other words:

Profit = Price – (cost per unit contribution to overheads)

If you get a positive value and utility and have determined that the business idea is sustainable, then you probably have a good business idea.

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