You wouldn't want to invest in anything without knowing the details, especially in business. But even if you've done the research and considered every angle, you've got more than just today to consider. How well will this new project pay off down the line, and what will it take to maintain when you get there? That's where a proof of concept comes in.
What is a Proof of Concept?
The purpose of a proof of concept is basically to show you that whatever idea you're considering could actually work for your business. It looks at the financials of the project - what it would cost to implement, to build, to keep up - and the revenue it could potentially bring in.
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A good proof of concept isn't just a quick estimate. It takes into consideration current revenue models and overall cost after extensive research and study. It gives a business a solid handle on where it stands now and what it could take on in the future. That way, you won't just be guessing at how a project or system will fit in with your current budget and processes. You'll have an in-depth look.
It's also important to look at the long-term feasibility of your project considering potential company growth. That's where scaling comes in.
Proof of Concept for Scaling
Say you're adding a new system to your business. Regardless of what it is, you need to know what your system's capacity is, and how you will handle it if that capacity needs to increase to accommodate your growing business. That's scaling; a measurement of how capable a system or process is at dealing with a heavier load.
So what does this have to do with a proof of concept? Whether you're taking on something new or just trying to expand a process that is already in place, a proof of concept will help you assess your current situation and plan out what it would take to grow.
Elements of Scalability
There are a few points to think about when looking at scalability, and the feasibility of these elements can be broken down in a proof of concept:
- Systems - System architecture is key here. If that isn't designed well, scaling the system is going to be a lot more challenging.
- Organization - Regardless of what your system can handle, you will need the right people in place to help business progress. A hiring and personnel issue can slow down your scalability efforts.
- Corporation - Once you've got the architecture down and the team in place, a workflow and standardized process will keep things moving.
Highlighting those three areas in a proof of concept will help you really estimate how prepared you are for scaling and give you a leg up on expanding your business smoothly, efficiently and on budget.
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