Step # 3 is Make sure there is market for your business!
Make sure there is a market for what you want to do before going any further.
Coming up with an idea for a business is easy. Sometimes it’s too easy and we have way too many of them. Now is the time to take that idea and make sure that there is a market out there for it. Statistics show that the number one reason why businesses fail is because there is no need for it.
Why is market research important?
You want to make sure that there is a reasonable certainty that there will be enough people willing to pay you for what you have to offer so that your business is sustainable. It doesn’t guarantee success, but it does help you feel more confident in your decision.
What to do first:
Identify a need
This is critical. If there is no need- or not enough of a need- there will not be a market for your business. Beyond that you need to determine how big, or important, that need is.
Identify who has that need
This could seem like it would be a lot of people, based on your product or service. That is a good place to start but you will want to narrow down that audience to find your niche audience.
Identify your solution
Your solution should be in direct correlation to the need or problem that you have identified. Make sure that your idea will actually solve the problem.
Once you have figured these three things out you are on your way to discovering if there is a market for your business.
Who is your target market?
As noted above, not everyone is your customer. Finding out who your target market is will help you identify everything you can about them. You want to know what they like, how much money they make, what kind of education they have and what their biggest issues or problems they have. You want to know who they are, so you know where they hang out and what language they use. In this way, your message will resonate with them.
How to determine if there is a market for your business
There are lots of websites and places to get demographics to help you determine if there is a market for your business. Those are very helpful and usually very objective. Make sure that you look to see how recent the data is to make sure it is still relevant.
One of the best ways to determine if there is a market for your business is simply to start talking to people. This is especially helpful if you are talking to your target market. Find out what they want and need. Ask them how they are getting that need met now. You can even share what you are thinking about doing and see what they think.
This can be done face-to-face, or you could post on your social media. You could also do a survey that would allow them to respond anonymously and honestly.
While it is tempting and easy to ask your close friends and family, their response might be a little skewed because of their connection to you. Asking the right people will give you a more accurate response.
Who is your competition?
This might be a short list, or it might be a very long list. If you think you have no competition, then that would lead me to think one of two things: you haven’t really researched your market, or you are offering something that there is no market for.
Most likely you need to dig a little deeper and/or broaden your scope of thinking.
With that being said, having competition should not scare you away. Competition is a good thing. It keeps us sharp and innovative. There is enough business for everyone so finding what makes you unique and stand out from the competition is the answer.
It is important, though, to have a thorough knowledge of your competition. You want to know what they are good at and what they are not-so-good at. What do their customers think about them? What do they offer that you will offer? How do they market themselves? Who is their target market? How long have they been in business?
If you have been following along in this series, you will remember that I had you do a SWOT analysis for you and your business idea. Now you can do the same for your competition. I recommend doing this for your top 3 competitors.
How to do a market analysis
You don’t need to be a business genius to do a market analysis to see if there is a market for your business. I’ll attach some links here that will help you find some demographics to build the foundation. Couple that with what you have learned by asking others for input.
Finally, take all that you have learned and add in your basic instincts to see what it tells you. If it looks promising, then try to come up with a way to test your idea. We call this an MVP – a Minimum Viable Product. It is a very basic version of what you want to offer that will allow you to get feedback without a lot of expense.
Create your MVP and beta test it with enough of an audience sampling to help you get an accurate reading on whether that audience exists for your business idea. Again, make sure you are beta testing with the ones who fall within your target market.
Here are some links to websites that will help you in your market analysis.
US Census Business Builder Census Business Builder: Small Business Edition – 4.2
Bureau of Labor Statistics Home: U.S. Bureau of Labor Statistics (bls.gov)
Finally……
As important as these first three steps are that we have shown you in the Steps to Start Your Own Business, there is still more to go. Each step should lead you closer to making the best possible decisions and build the right foundation for your business.
The reality is that it is easy to start a business, but it is tough to sustain and grow a business.
In our next step we will bring all of this together and create a simple business plan that will serve as your pathway to start and grow your business.
For help with this or any other area of starting or growing your business- we’re here to help. Contact us at rhondaloweconsulting@gmail.com
