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How to Evaluate Any Business Opportunity

Before you chase the next shiny thing, run it through these five questions. This isn't a proprietary formula — it's common sense that most people skip because they're too excited to think straight.

The 5 Questions

Every opportunity — freelance gig, product idea, partnership, job offer — should survive all five before you commit a single hour.

1. What's the realistic upside?

Not the best case. Not "if everything goes perfectly." What's the most likely revenue in 6-12 months based on what you can verify today? If you can't put a number on it, you don't understand it well enough to pursue it.

2. How fast does money arrive?

A $50K opportunity that pays in 18 months is worth less than a $5K opportunity that pays next week — especially if you need cash flow now. Time-to-cash matters more than total size when you're building.

3. What do you have to give up?

Every yes is a no to something else. If this new thing takes 20 hours a week, those hours come from somewhere. Name what you're sacrificing. If you can't, you're lying to yourself about your capacity.

4. Can you actually execute this?

Do you have the skills, tools, and connections to pull this off? Not "could you learn them" — do you have them right now? Honest self-assessment here saves months of wasted effort.

5. What's the exit if it fails?

Can you walk away clean, or does failure create ongoing costs (debt, reputation damage, contractual obligations)? The best opportunities have cheap failure modes.

Common Mistakes

MistakeWhy It HappensWhat to Do Instead
Scoring on potential, not evidenceOptimism bias — you want it to workOnly count what you can prove today
Ignoring opportunity costNew things feel more exciting than current thingsWrite down what you'd stop doing
Asking friends for opinionsFeels like due diligenceAsk someone who's done it and failed
Skipping the "can I actually do this" checkEgoList specific skills needed, rate yourself honestly

Resources to Go Deeper

Warren Buffett's "two-list" strategy for prioritization is widely available online and worth reading.
The Eisenhower Matrix (urgent vs. important) is a simple tool for sorting opportunities by type.
Charlie Munger's "inversion" principle: instead of asking "how do I succeed," ask "how would I guarantee failure" and avoid those things.

Want our proprietary scoring system with exact formulas, weighted variables, and worked examples from real deals? That's in the full Opportunity Score Framework.

Get the Full Framework — $29