My personal experience has taught me that growing a business, whether organically or by acquisition, is never easy. Coupled with my experience working with other entrepreneurs who are distracted easily by shiny, new opportunities, I recognized the need to develop a quick way to assess or evaluate new ways to grow a business.
These four simple questions have served as a valuable tool to set boundaries for quick-start entrepreneurs by preventing them from pursuing unprofitable, costly new lines of business, partnerships, business acquisitions, etc.:
Doing The Math Really Does Matter
The first step in evaluating a new opportunity is to compute the potential gross profit margin to be earned. Although the astute entrepreneur instinctively knows when new business will provide a healthy gross profit margin, doing the math is time well-spent. And when the additional revenue from a new opportunity is significant, or at least sufficient enough to ultimately contribute to the net profitability of the business, it has passed the first and most important test.
Read more at FORBES