My Preferred Business Idea Evaluation Tool

All, Business, Growth & Success     by Dan Muhlenkamp

“What the ____ is a Business Idea Evaluation Tool?”

It’s a big name for a simple, easy to use tool, that can really clear you mind. Almost sounds too good to be true as I write it but I know it’s not because I’ve been using it for some time now. It flat out works.

I know what it’s like to try to grow a business. If you’re like me and you have a team like mine, you get a lot of ideas coming at you all the time. Many sound great, but you can’t do them all. As a matter of fact, you can’t come close to doing them all. So what you end up doing is trying to do about 3 more than you can handle, and all of them suffer. (You may want to read this Life Lesson Of Juggling)

So how do you decide which ideas to do? You can’t just go by what sounds good, you have to think this out. And do you really evaluate each idea before you decide? If you’re not careful you’ll spend all your time evaluating and never deciding, but if you don’t evaluate the idea, you’ll spend all your time and resources on the wrong ideas!

Enter to Business Planning Idea Evaluation Tool. This is going to sound more complex than it is. If you download the tool, you’ll see how it works pretty quick. It takes just a little setup so that every idea is evaluated on a similar basis.

The tool is based on some pretty simple principles. Every business has a few things that are really important to consider. The tool allows you to use up to 8, but most of the time 5 will do. The 5 default ones we put in the tool (you can change them) are:

  1. Fits Our Mission Statement
  2. Potential For Profit
  3. Time Required
  4. Cost in Money or Capital
  5. Chances of Success

We realize the importance of these (or whatever your criteria are) varies from business to business, so the tool allows you to weight each criteria. Lastly, to finish the business setup up, you describe what is a Best, Medium or Poor outcome for each criteria. Now you’re ready to start comparing ideas.

When you go to the Ideas tab you can see that you just enter your idea and describe what success is for the idea (that’s pretty important). Then you rate each idea in each of the Criteria you set up.  The tool will consider how you weighted each criteria, and give the idea a score.  Now you can compare your ideas on “level playing field”. I’m betting you’ll be surprised at how great this works.

In real practice, I usually leave open projects in the tool so I can compare new ideas against what I’m working on. It also keeps me from trying to juggle too many projects. Sometimes people add a column to assign projects to different people. That sounds good, but it gets a little complicated sometimes.  I also have seen a column added for “Status”. Again, could be useful but I do like to keep things simple. I’ve created a MUCH more complex model which was supposed to be a project management tool also, but it was so complex it didn’t get used.

So CLICK HERE to download the tool, and let me know how it works for you!

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