You can grab the Excel sheet and fill in your data there or simply modify the tables listed below.
This part checks demand signals and market size before looking at profitability.
| Data \ Business Idea | 1. Home office setup | 2. Non alcoholic drink subscriptions | 3. …. |
|---|---|---|---|
| Google Trends | Significantly up | Up | |
| Size of market | 50.000 | 50.000 | |
| Cost | €500 | €200 | |
| TAM (size x cost) | €25.000.000 | € 10.000.000 | |
| Worth pursuing? | YES | YES | |
| BONUS: How excited am I about this? | Some what | Not that much |
Goal of this pass: only keep ideas that have rising demand and a big enough market to bother modeling.
| Revenue | 1. Home office setup | 2. Non alcoholic drink subscriptions | 3. …. |
|---|---|---|---|
| Price of product | €500 | €40 | |
| Costs | |||
| COGS | 0 | 10 | |
| Labor | 25 | 0 | |
| Shipping | 0 | 25 | |
| Profit / sale | |||
| (price - costs) | €475 | €5 | |
| % margins | |||
| (profit ÷ price) | 95% | 12.5% | |
| Target profit | €1.000.000 | €1.000.000 | |
| Total sales needed | |||
| (target profit ÷ profit per sale) | 2.105 | 200.000 |
Goal of this: only keep ideas that have high margin and are easy enough for you to do. In this case, home office setup has a high margin, low sales needed, compared to subscription idea. Since I am not a big sales person, I would pick home office idea and continue analyzing it.