Like everything in life, businesses also go through stages before they become successful. A business starts with an idea. Having a business idea is quite easy for entrepreneurs. The tough part is the next step where one has to right down the business idea and plan for it. A key step in the idea stage of a business is doing research. It helps the wanna-be entrepreneur check whether their idea is viable or is it a waste of resources. However, on most occasions, the thought of a new business idea might be exciting and one may be tempted to act before planning.
Why Do Research
Before executing the business idea, one should do an extensive research to ensure the business will be successful. One has to know that the idea is not new in the market; other entrepreneurs might have tried it before and failed or it could also be something that is already abundant on the market. Therefore, research will help the person to know the state of the market and the competition. It will enable you to know whether your idea has a potential to grow or you will have to go back and start from scratch. Research also helps you learn how useful your product or service is, and how you can position it in the market to ensure success. For research purposes, you may have to take trips to the library or spend a few hours online to access the necessary books, previous research reports, state agencies and magazines that can give you insights in your field of interest.
Approaches to Research
There are different approaches to research. One may either do a SWOT analysis or focus on the following four key issues:
- Company – what will you be offering to your clients and what message you would like to pass to them?
- Customer – think of the different groups of customers, that is, the purchaser, the influencer, and the end user.
- Competitor – think of your idea in relation to primary, secondary and tertiary competitors. Think of how often you compete with each other and how you compete with the different groups.
- Collaborator – think about the people or organizations that are out to ensure your idea succeeds. There are groups like the media and various associations that help to ensure that you are known by your target audience.
In the SWOT analysis you are able to understand the strengths and weaknesses of your product and services. It enables you to analyze the opportunities you have and the possible threats.
What to Research
You need to do research the people who are already offering what you want to offer. In case there are people who had an idea like yours but failed to get a market for their product or service, find out what they did wrong in order to avoid doing the same mistake. It’s also good to find out whether the market is already saturated or if there’s still room for more. Research on the amount of money spent on your industry in the market annually and whether the market wants what you are planning to offer. You should also find out whether your idea is a basic need or something people can live without. This will enable you to know if your product or service is viable in the market. It will also help you in positioning yourself in the market.
It’s also important to know about the competition in the market. You should know who you will be competing with, what they are doing and how well they are doing it. Identify what they are doing wrong and how you can correct it. You can learn about the flaws and the success of your competitors by asking their customers questions regarding their tastes, preferences, and whether they are satisfied by the current offering. Also, check out the biggest stakeholders in the market. Look at what they’re doing to dominate the market. The important thing here is to learn what they are not doing and which potential customers they do not cater for so that you may fill the gap. Additionally, when sizing up the competition, get to learn how much the customers are willing to pay for the product or service. You should be able to know how you can optimize what they are currently getting in the market to ensure you provide a smarter, better and more cost-effective solution; hence, get a competitive share of the market.
Before plunging into business, one needs to identify the target audience. You should be specific about who you want to sell your product or service to in order to ensure a solid market. Research on whether you can reach your target audience and how you can do this. The customers will be the key determinants if your business succeeds or fails. You have to know how to appeal to them. Make sure you focus on a certain group of people and ask them the right questions. This helps you understand them better and know what they want; thus, it’s easier to satisfy their needs. The other important group of people you need to research are your collaborators. These are the people and organizations such as the media and associations that help sell your business to the customers. They are usually interested in the success of your business but are not necessarily rewarded for the success. You also need to find out about staffing. The people working for the company usually contribute to the success of the business. You need people who understand what your business entails and know how to relate well with the customers.
Other important issues you need to know about when starting a business include: how to carry out the business, business development, and advertisement. Get a business name that’s unique and appealing to the target audience. Through online research, you can find a suitable and catchy name for your business. Ensure you know how to deal with legal issues. Research beforehand the important licenses, certification, and insurance cover you need for your business. You also need to know about financing. You should find a good bank for your business. The bank you choose should be able to offer you good services and credit to support your business. Look for a qualified accountant for your business to help you make the right decisions regarding finances. Think about how you will pay yourself: whether the profits will be going back to business or you’ll use them to cater for your own expenses. Another important aspect is how you’ll get your name known to your target audience. Think upfront about your advertisement tools. It’s crucial to know how to get your business out there in order to know what really works. Creating a website for your business is also a good way to sell yourself. Therefore, it is good to research what information and design will be required for the website to ensure it is appealing to the target audience.
Most businesses fail due to the lack of a good foundation. The early stages of a business life cycle are really important; therefore, ensure you do good research. After analysis of your research, you may find that your idea had loopholes. This doesn’t necessarily mean that you forget about it and start from scratch. Sometimes your idea just needs fine tuning for it to work. Just ensure that you do an extensive research before putting your idea into action. There are many areas you can get into such as writing, programming, web design, etc. No matter what you decide to do, remember the importance of research!
Kevin Nelson started his career as a research analyst and has changed his sphere of activity to writing services and content marketing. Apart from writing, he spends a lot of time reading psychology and management literature searching for the keystones of motivation ideas. Feel free to connect with him on Facebook, Twitter, Google+, Linkedin.