Skip to content
Home » Blog » David Skriloff – How to Evaluate a Business Proposition

David Skriloff – How to Evaluate a Business Proposition

David Skriloff - How to Evaluate a Business Proposition

Our lives are the product of millions of decisions. From what to wear in the morning to which movie to see on a Friday night, each choice we make contributes towards our progress and development. This is true of major decisions as well — such as whether or not to start a business — but it’s important that these choices be evaluated carefully by considering all their pros and cons before proceeding with them. Here are some steps by David Skriloff for evaluating a business proposition.

How to Evaluate a Business Proposition per David Skriloff

Review the Business Plan

According to David Skriloff, the first thing to do is review the business plan overall to determine if you understand what it’s asking for. Does it make sense? Are there plenty of supporting details? Is the information current and accurate?

If possible, speak with those who have been involved in the process of putting together this plan, such as advisors or other people who work on these types of plans regularly. Understanding their areas of expertise will give you a better idea about how much weight to place on certain pieces of data included in your analysis.

Review the Financials

The next step is to review the financial statements included in the business plan and make sure you understand them. Begin with a balance sheet, which includes assets (what your business owns), liabilities (what it owes), and equity (what’s left over once you subtract what the company owes from what it owns).

Review each of these components individually and ask yourself if you can make sense of each piece – or if there are certain pieces that give you pause. If there are parts that make no sense at all, this should be one of your first red flags.

Profitability Analysis

Next, David Skriloff wants you to take a look at profitability, including how much money the business makes, how much money it spends, and what its margins are. Profitability is an important piece of the puzzle, but there are other factors to consider as well.

For example, if a business requires large investments upfront to produce revenue or make a significant impact on your bottom line (such as construction), you should take that into account when determining whether or not this business will be profitable in the long term.

Using ROI Analysis

Finally, use return on investment analysis, which takes into account the amount of time and cash required for a project versus how much money you expect to make from that project. This can help determine whether your business could potentially support itself with enough capital over time or if you’re facing deficits right off the bat.

Concluding Thoughts by David Skriloff

Reviewing the business plan, examining the financial statements, and performing profitability and return on investment analyses are all key steps in evaluating a business proposition. These steps will help you determine whether this business is viable and has the potential to be profitable over time.

Additionally, David Skriloff believes that it’s important to consider other factors like upfront investments, competition in the market, and overall feasibility before making a final decision. Ultimately, your own research and understanding of the industry will play a major role in your evaluation process.​