Before you start a business, you need to be sure that the marketplace wants what you are offering. Nothing sucks more than pouring your heart and soul into a new business venture only to find out that people just aren’t interested.
You’ll need to conduct some market research. It doesn’t need to be a seven month long process or a 100 page document that you create, but you do need to ask yourself some questions and do some work to find out the answers.
Without a thorough knowledge of the marketplace and existing businesses, you may be putting yourself in danger before you even start. The following questions will help you to identify some important issues in your marketplace, and it will help you to double-check if there are crucial issues that you may not have considered before you start your new business.
1- Are there other businesses similar to yours that are currently operating in your market? Existing businesses like yours is not a bad thing, it means there is a market for your business.
2- How do these businesses appear to be doing? Do they look like healthy, thriving businesses?
3- What are these businesses doing well?
4- What are these businesses doing poorly?
5- What could you do to compete with these businesses? How would you stand out? Is there an opportunity to create a competitive advantage here?
6- How much competition is there? Does the market appear to be saturated?
7- If yes, are there ways that you can alter your business plan to suit a niche market?
8- What kind of people would want to buy your product or pay for your service? What’s your ideal customer profile?
9- Are there enough of these types of potential customers living in your community to support your business? Where are they located? Will they frequent the area you plan to be in?
10- Can the economic profile of the community support your business? Are you selling a premium service with prices to match? Can the community support this type of business? Be sure your product or service matches the economics of the community.
11- Are these people the type of customers who are likely to become repeat customers? If so, why?
Summary
Don’t think about the above questions as a way to rule out starting a business, they may actually lead you be become even more creative and innovative about your new venture. To get some further insight, have someone you trust answer these questions too, they might have some suggestions you never thought of.
Once you have completed your market research, you can start working on your marketing research. You can read a previous post titled, Five Steps to Conducting Great Marketing Research for Your Small Business
Hi Gary, Question 1 is crucial as you point out! If you don’t have competitors, you don’t have a market
Yo’re so right Niall, so many new business owners I work with are worried about competition. I tell them that competition is good because it shows there is a market for what you are selling and that people understand the product or service. Also, customers have something to compare you to, which is great if you are offering a superior product or service. Cheers!
I totally agree with you. When conducting a market research for a business you must be very careful. You have to find answers to all these questions!
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Market research is so important, yet we seem to rush through it trying to get our business off the ground. Doing this might save you from making some critical mistakes in those first few crucial months
Thanks for the feedback Jill, appreciated!
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