What is the formula you are using to determine if your business idea is profitable enough - before you starting it ?
Unfortunately, there is no real formula, as there is a lot of guesswork involved. But, if you're looking for one. It's Upside versus Downside. If it costs more time or money than you can get out of it, it's not worth it. If you can make more money doing something else, it's not worth it. If neither of the above statements are true, you may have a worthwhile idea
better to make a business plan before you start anything and while making it you'll use the research tools that are usually given in books that teach how to write a business plan, for researching to see if your idea will be viable or not. You can conduct surveys, polls, focus group discussions to check if your business idea gonna be a success or not.
Do it, That is the best way to know. You will not gonna learn if you just think the idea. I have seen lot of men who never acts, and then their idea become junk....
Find a reputable Accountant, they will know the average business ratio of typical businesses. Also there are books that banks and lending institutions use that help them determine values of a plan. Some major public libraries will have books with business ratios that will help you determine what is profitable.
1. Do a google search for your main keyword and find out if anyone is using PPC to direct traffic to a similar product or service. 2. Check out amazon, clickbank, ebay, etc. to make sure that people are BUYING similar products and services 3. Check google keyword tool to make sure people are SEARCHING for similar products and services, and to make sure that the market has enough "depth" to make money in 4. Check google trends to make sure that your idea is on a flat or, ideally, upward trend. That's pretty much it. If it passes all those points, your niche should be a good place to market.
I will check how my competitor perform. How much they earn per month. From there i will do some calculation about my company profit.
Figure out the cost involved, look at competition, determine how much you will need to sell at a specific price point to be successful. Basically you need to research and write a business plan, after that you will have a good idea whether you can make the idea fly.
Try to do a kind of a small marketing research - find ut if your product/service will be rather popular among potential customers and they really need it. Start from asking the people whom you know and then ask them to ask their acquaintances - this method is absolutely free but provides perfect results - I used to do so.