Researching your business idea is a process worth doing
Suppose you are looking to set up a business. In that case, the main question you will want to answer is: Am I capable of creating a profitable business by appealing to enough consumers to purchase my product or service at the price I want? Fortunately, you have several resources available to you, many of which are free. Here is a list of ways to research your business idea.
Research is one of the most important tools at an entrepreneur’s disposal. It can make or break the future of a company. Unless you do it right, it can be detrimental to your business. Beyond asking your relatives and friends whether they would buy one of your items, research is much more than that. Asking your mother if she would buy from you is not the most comprehensive research available to you. They will have a slight bias towards you :-)
Examine your potential market
Your research should examine your prospective market, your competitors, industry trends, forecasts for its development, and its possible direction, no matter what your product or service is.
The fundamental query you must answer is whether there are enough people out there who want to purchase my product or service at the price you want to sell it for my business to be viable. Fortunately, there are many resources available to assist you, many of which are free. Here are seven ways to research your business idea.
1. The library
The British Library Business and Intellectual Property Centre (BIPC) has plenty of resources to assist entrepreneurs. You can find market research reports there, which give information on the largest players in a sector, the sector’s potential for growth, and so on. The City Business Library is another good resource, providing free information and free seminars for entrepreneurs and startups.
2. Find out what customers are seeking online.
The free Google Ads Manager keyword tool (sign up and then click on reporting and tools) tells you how many people searched for things on the internet using particular keywords in the past month. Ubersuggest is a hidden gem, and you can get a lot of insight for free, and the monthly fee is not prohibitive.
3. Investigate your rivals
It’s imperative to conduct competitor research. By researching their websites, how and where they sell their products and services and how much they charge.
Prior to working with a company, research their online reviews and accounts to find out more about them. Check out Companies House or Duedil for more information if they are a private firm. Their financial records should be readily available online if they are a PLC. You want to find out what they do well so you can replicate it and what they do poorly so that you may improve.
4. Ask customers what they think about your product or service
Visit the spots where you think your target consumers are most likely to be found – for example, the gym if you are developing a healthy beverage or a mother and infants playgroup if you are developing a baby item – and talk to them.
The data you gather won’t yield any quantitative research, but it will be sufficient to either support or disprove your hunch. You can then seek out some quantitative information by asking 100 people or 200 people whether they would purchase your product and how much they would pay for it. You may even design an MVP to test whether your service or product has market demand.
5. Finding your niche is key.
Before you decide to enter a new market, consider what’s currently being sold there and where your product or service might fit in. Are you planning to be the most expensive, the cheapest, or somewhere in between? Who will be above and below you in terms of price and quality?
Develop a mental picture of your target consumers and the jobs they perform, then make your product as appealing as possible to them. Consider your consumer demographics, how frequently they will buy your product, and why they will buy it.
6. Be creative.
Four people created a stand at a local jazz music festival to find out what people thought of their pulped fruit drink. Innocent Smoothies was created when the ‘Yes’ bin was overflowing at the end of the weekend after customers voted on whether the entrepreneurs should give up their jobs to make their beverages full time by throwing their empty bottles into either a bin marked ‘no’ or a bin marked ‘yes’.
7. It is up to you to do it
Take time to correctly interpret what is happening based on your research, experiences and perceptions. You must be out there absorbing the atmosphere and listening and talking so that you can respond appropriately. You can do all of the above work yourself. Researching your market and the competitors you will face is a vital piece of work. It will enhance your chances of success. Researching your business idea is a process worth doing. But more importantly, it’s worth doing right.
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