Jul 30, 2015
Once you have found an idea that you think could be turned into a business, it is important to go through a few steps to ensure it is a good idea.
Researching the market is crucial before any product launch. Understanding your market as well as its needs and potential is essential to any business.
Identify your market – Who would your potential buyers be?
Ask your market if it’s interested - Friends and family are very unlikely to be objective or tell you the truth, by fear of upsetting you. The best approach is to ask a representative sample of potential customers a few questions:
Would they be likely to buy it?
How much would they pay for it?
Would they buy yours instead of the competition’s? and why?
This can be done either face to face or by phone, depending on the type of business.
Competition – It is essential to know who your competition is and how you could differentiate yourself from them. In a nutshell, why would potential customers buy from you rather than your competitors?
Purpose of your product or service – All products and services will usually serve a purpose. No real purpose will mean no customers, hence no business.
Is the idea viable – Does your product idea make sense? Is there a market for this specific product? Is it financially viable?
Profitability – When calculating profitability, it is important to calculate a realistic selling price Vs costs + overheads. Anyone starting a business would usually be aiming at making a profit. If the product is not viable, the business can’t be sustained.
Growth potential – All business should have room for growth, especially start-ups. It is therefore essential to wisely estimate the business’ growth potential in terms of market and in terms of product.