Successfully launching a new business is difficult enough – you have to consider every minute details about the products, prices, promotions and places you will try and sell. But before you press the ‘launch’ button, it is absolutely essential that you determine whether or not there is a real market out there for what your instinct tells you is a great idea. Skipping this crucial step could lead to a waste of time and money, at a time when your start up needs to save both.
Here are two questions you have to know the answer to before jumping into a new enterprise. Both of these can be answered with some in-depth secondary market research (start with a Google search and work up from there!):
Who could buy my product? Before you even start working on prototypes, do some in-depth market research to calculate how many potential buyers there are out there. Is the size of the market growing or shrinking? Are there any ongoing fluctuations in the industry that could speed up the market growth?
What else could that market buy? You know the problem that your product or service will solve – but put yourself into the shoes of the potential buyer and try to find a solution without knowing about your company. Are there other companies promoting the same product/service, or more importantly – are there alternate solutions to the same problem? If you still feel your product will be able to compete, this process can help you address how to promote your product against other ‘solutions’.
You’ve done the research into the industry and you’ve determined that your product really stands a chance at competing and maybe even dominating a market. Great news! But there’s still research work to be done as an uninformed launch can cripple your enterprise as it comes out of the gates. Now it’s time to conduct some basic quantitative research. Some ‘lifelines’ to get you started:
Ask the Audience. If you already have a small customer base, use them as a source of feedback. Why did they buy and what would they like to see done differently? Sometimes clients can help you see the largest business opportunities that you haven’t even considered. And depending on the client, they often feel honored to be asked, or to have a first look at a future product. Remember that existing customers are also the most likely market to buy future products, so a survey of dedicated users research will pay for itself through future sales.
Phone a Friend. Assuming you’re already in a similar industry to the one you’re entering (as entrepreneurs usually are), consider turning to a mentor or other expert in the industry for their insider’s advice. Listen carefully to these industry veterans, as they know what the industry offers, and what it needs most.
Ready to begin? We help small businesses get started with DIY market research every day.