by Corporate Relations and Business Strategy Staff
Looking for ways to diversify your practice and offer new services to meet emerging needs often means stepping outside your comfort zone and into unfamiliar territory. Using a systematic approach to evaluate potential opportunities can not only help you consider a variety of important issues related to launching a new service, but also facilitate effective decision making and increase the likelihood of success in new ventures.
This article presents one framework for evaluating new practice opportunities, as well as a variety of questions to consider when thinking about embarking on a new venture or simply adding additional services to your existing offerings.
Taking stock of your current practice and professional activities is an essential component of any good evaluation. When evaluating a potential opportunity, consider:
- Are you interested in or passionate about this issue, service or population?
- Is the new activity consistent with your professional competencies and strengths?
- Does it fit your mission?
- Can you integrate the new service into your business plan or revise your plan to include the new venture?
- Do you have (or can you acquire) the necessary skills?
- Will the new venture require knowledge, skills or abilities in areas in which you are not particularly strong?
- Are your practice finances sound enough to support your new direction?
- Will the new activity be profitable enough for you to justify the time, energy and resources needed?
- Do you have the necessary resources (e.g., office space, materials, funding, administrative support) or can you afford the cost of acquiring them?
- How risky is the venture and how much risk can you tolerate?
- How can you differentiate yourself in this area to create a competitive advantage?
- Can you create a clear strategy for developing, implementing and marketing the new service?
- How long will it take you to develop, implement and market the service?
- How long will it take you to recoup the investment necessary to build and launch the new service?
- What will you need to do to be successful in your new venture?
- Is this a realistic opportunity?
It is also important to conduct an external analysis that includes a review of general environmental trends, developments in your local community and characteristics of the market you are considering entering. Be sure to consider both the current environment and likely future developments.
- What are the key environmental trends, opportunities and threats related to such factors as demographics, the economy, legislative and regulatory developments, technology, public opinion and attitudes, and the evolving health care marketplace?
- Is the new service a good fit with the environmental trends you identified?
- Is the service needed in the community?
- Do potential clients know they need the service and what will be the likely volume of demand?
- Is demand increasing or decreasing?
- Will the demand last or will it quickly disappear?
- What effect will the service have on individuals, groups or the community and what is the potential benefit?
- Who are the referral sources or gatekeepers and do you have access to them?
- Are there related services you can offer to complement the new venture and add value?
- How attractive is the market? Will others find it lucrative and start to offer the same services? Tip: The more attractive the market, the more important it will be for you to establish a strong competitive advantage.
- If competitors enter the market, what is the likelihood of supply outpacing demand?
- What are the barriers to entry (e.g., required education, credentials, special expertise, necessary resources, startup time) that make it challenging for others to enter the market and how difficult are those barriers to overcome?
- How much control does the purchaser have over aspects of your business, such as the way you provide services, how much you are paid and administrative requirements? (This is particularly important when a large portion on your business will come from third party payers or other contracting bodies).
- Are there substitute products or services available at lower cost? If so, why would clients choose your service over lower-cost alternatives?