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Pursuing your dreams is always a serious undertaking. The stakes are higher if you are starting a business where you put your personal money and future on an idea.
With every endeavor, you have to weigh the risks against the reward. For instance, if you have a high-paying job with a clear career trajectory, would it be a good idea to leave it to run your own business?
The marine industry is a specialized sector that offers unique challenges. But the potential for profit is enormous, which explains the stiff competition.
Here are some crucial questions to ask before pursuing your water-based business idea:
How realistic is it to realize your business from concept to delivery?
It is one thing to have an idea, but to take the necessary steps into making your dream a reality is quite different. For one thing, you need to study the landscape. If there are already multiple companies offering the same service, it would be tough to break into the industry without a distinct identity. You need to separate yourself from the pack. Is your idea enough to achieve this goal?
Then you need to answer the following questions:
- What is the potential rate of success or failure?
- How much money would it entail?
- Where will you source the budget to fund your business?
- Can you absorb the loss, if ever?
- How much of your time can you give to the business?
- What is your timetable?
- What is your fallback plan if in case the business does not pan out?
Will you rent or buy heavy equipment or tools?
Whether you are in the construction, mining, or marine industry, one of the primary questions you need to address is whether to buy or rent heavy equipment. Should you take out a substantial loan from the bank so you can invest in new tools?
But without a SWOT analysis or PESTLE Analysis, it is tough to come up with the answer. For instance, while buying underwater hydraulic tools seems the logical move, it can be hazardous, especially if you are not familiar with their use.
Even if you conducted your exploratory tests and the potential market absorption of your product, you have no guarantee on the returns on investment (ROI).
Another alternative is to rent the equipment first and later purchase the necessary tools once your operations are already stable and sustainable.
The industrial equipment rental industry in the US continues to expand due to its multiple uses. The market has a compound annual growth rate of 3.6% between 2014 and 2019, with an estimated value of $39 billion for the same period.
Is the market ready to absorb your idea?
There are two methods to gauge potential market absorption: SWOT and Pestle.
SWOT Analysis refers to Strengths, Weaknesses, Opportunities, and Threats. The technique is very flexible in the sense that it can be used to perform a market or business analysis of your operations. You can even use the method to gauge the economic strategy of a whole country.
Alternatively, you can also conduct the PESTLE Analysis. Similar to SWOT, the PESTLE stands for:
While the technique can be used in marketing, it can also be exploited to assess your own operations, as well as revenue potential, when you are about to launch a project or product. Using PESTLE, you can attack the project from every possible angle.
Whether you use SWOT or PESTLE, you can determine the sustainability and profitability of starting a new business before making the leap.
Photo by Pop & Zebra