10. 10
Factors
• How large is the market?
• Is the overall market growing?
• Is the market expected to grow
within the next 3-5 years?
• What are the typical margins within
your industry?
• Are customers in this niche overly
price sensitive?
• What is the general economic
health of your customers?
• Are there any threats of any
substitute products/services?
11. 11
Factors
• What makes your offering unique
and different?
• What value does your product
deliver?
• Do you have a valid “Blue Ocean”
strategy or “Red Ocean” strategy?
• Are your
products/services priced
dramatically differently
than the existing market?
• How powerful and
differentiated is your value
proposition?
13. 13
Comments & Scoring
• Great marketing niche
• Growing
• Attractive customers
• High tech unique offer
• Superior delivery system
• More user control
16
14
30
15. 15
Factors
• Does the sale of the product make
significant profits or are add-on
sales required?
• Do you have a limited profit margin
due to the competitive nature of the
market?
• Is your revenue recurring or one-
time hits?
• Do you have a competitive cost
advantage?
• How do your margins
compare to your
competitors’?
• Are any of your revenue
streams proprietary?
16. 16
Factors
• Is the product marketed or does it
have to be sold?
• Can a salesperson of ordinary skill
sell your offerings?
• Do you have a sales pipeline model
that can accurately predict future
sales?
• How does the cost of customer
acquisition compare to the lifetime
margin generated?
17. 17
Comments & Scoring
• Proven sales model
• Magnetic marketing
• Exceptional margins
• Significant upsell possibilities
• Better margin than competition
• Margin protection
1115 26
18. 18
Factors
• Does your product/service have
competitive advantage based on
differentiation or focus?
• How significant is the value and
quality of your intellectual property?
• Are there any existing threats from
substitute products in your market
industry? If so, how significant are
they?
• Do you have a low break-even
point?
• Do you have a meaningful cost
advantage?
• Are there financial barriers that
help or hurt you?
• Are there opportunities to grow or
modify your value chain?
• Will you be able to maintain or grow
your competitive advantage?
19. 19
Factors
• If you fail to innovate fast enough,
how severe are the consequences?
• How much do you need to innovate
to keep pace?
• How well do your competitors
innovate?
• In this industry, how significant is
the competitive advantage gained by
successful innovation?
• How much of an advantage or
disadvantage is this combination of
need for innovation and ability to
innovate?
20. 20
Factors
• Does the negative impact of a pitfall
kill the business?
• Are there any potential future
threats from changing demographics,
consumer behavior changes, and
other trends?
• Is your business prone to potential
government or regulatory policy
changes?
• Is your business overly reliant on
trends, fashion, or whims?
• Is your overall business vulnerable
to litigation or legal pitfalls?
• Is a large competitor entering your
market a possibility?
21. 21
Factors
• Will you be able to sell your
business for enough money so you
would never need to work again if
you choose?
• Is the business over dependent on
a few customers?
• How reliant is sales success on
owners’ involvement?
• What happens if you immediately
had to stop working in the business?
• How many key partner, vendor, and
customer relationships are
dependent upon the owners?
22. 22
Comments & Scoring
• Solid current competitive advantage
• Advantage should continue
• Solid moats of protection
• No significant threats
• Strong innovation culture
• Consistently out-innovate
competitors
• Patent protection
• Weak competitive innovation
• Product somewhat faddish
• Consumer whims favor us now
• Other similar offerings have lost
favor
• Technological obsolescence an
issue
• Exit plan – go public
• Strong management team
• Excellent income
8
24
8
2
6
