We all encounter problems in everyday life that are just screaming for a solution. Most people simply ignore these opportunities, but the entrepreneur knows that each one of these opportunities could be the kind of idea that leads to a painfully successful business venture.
However, so many business startup ideas fall flat on their faces before they even have the chance to get off the ground. Why is this? Isn’t there some way to know in advance if your startup business will fail or flourish?
The answer is yes!
With the proper time and market research, you can tell if your brilliant idea is actually worth trying to realize or if it is better left in the circular file.
However, you have to be willing to put in the time and effort to lay the groundwork to make a solid business idea thrive. Many businesses often fail because of a lack of research and proper planning.
Great business ideas come from seeing a need and understanding how to meet that need. Whether it’s a product or a service, you have to have a market for it.
Extensive market research can help you determine how many people would benefit from your idea, what the competition is like, and who your target customers will be.
Market research is more than just asking friends and family if they think you have a good idea on your hands. That might be one place to start, because if your family and friends can’t even back your idea, you probably have a dud.
However, professional market research should be one of the first things you do to validate your startup business idea.
You need to know if your target customers will actually buy your product or service. It does little good to open a highbrow doggy-grooming salon in a poverty-stricken area. Likewise, opening a fast-food chain near the most exclusive area of town might also be doomed to failure.
Location is key, so as you think about your customer base and their needs, you can also focus in on where your ideal business location would be.
In business, as with much of life, timing is everything. You might have a good idea, but it might be the wrong time to execute it.
Keep a journal or log of all your great ideas (and even the not so great ones) and make sure you plan the good ideas accordingly. This might serve you in several ways, from helping you see what you’re interested in to inspiring you to find that one idea that keeps coming up.
Remember that a truly good business venture idea leaves the business with room to grow. Don’t get caught up in the latest fad or trend. Especially when it comes to your business website. Remember the pet rock?
While it was lucrative for a time, it didn’t have staying power, which is exactly what you want if you want your business to expand and succeed.
Market research can help you to forecast the demand for your product or service in the future. What will the demand look like next year, in two years, or even five years down the road? If your product or service will be waning in demand, you should carefully weigh the cost of starting a business that you know may fail within a few years.
Your business idea doesn’t have to be new, but it should be unique in some way. What twist do you bring to this area or industry? How is your business different? Have you chosen a niche?
Think about how Subway changed the fast food market. They still offered convenience food fast, but they brought a fresh spin to an over populated market. Even now, they corner their share of the market by distinguishing themselves from their competitors.
You can validate the uniqueness of your idea in several ways. Extensive competitor analysis can show you where there still might be a need in an existing market.
Checking the Intellectual Property Office’s patents database, even if you’re not planning to apply for a patent, ensures that you aren’t violating copyright or patent law. Your startup can’t afford to be open to a civil suit. Not a good thing.
Blind ignorance of your market and customer base is one of the major causes of business failure. While your idea may be the best idea ever in your own mind, your business won’t survive on enthusiasm alone. Conducting exhaustive market research is absolutely essential.
You must know to whom you are marketing and what they expect from the product or service you are selling.
Bad marketing is the second reason so many new businesses fail. A fairly large portion of your initial time and money should be spent on properly marketing your product or service. Using strategic marketing techniques, those that target your intended customer base, will help you to maximize your marketing dollar.
You wouldn’t market a new chainsaw during a children’s television program, just like you wouldn’t expect to see an advertisement for this year’s must have toy in a gardening magazine. Make sure you know as much about your customers as you can: who they are, what their habits are, and what type of marketing outlet is most likely to get their attention.
Failing to distinguish yourself from the competition can leave your business struggling. Look at what other similar businesses are doing and try to find your niche area in that field. What do you do differently? How is your business unique?
This is the time to seriously think about what distinguishes you from the pack, not to simply say “I’m better” or “I’m different.” You must know what specific things set you apart. These are sometimes known as Unique Selling Points (USPs). Be sure you know that from the moment you start planning your business.
High costs, especially upon start up, are almost always a business killer. If you’re spending as much as you are taking in, there’s no room for profit or expansion. Start small and keep your overhead to a minimum. Can you work out of your home? This might be a simple way to test the waters with your idea and will eliminate the costs of office space and equipment.
Do you really need ten employees? Having friends and family help at the beginning will cut employment costs and give them a sense of ownership in the idea.
Poor pricing is yet another difference between a successful business and a failing one. Researching your customers’ spending habits and earning power will help determine how much and how often they will partake of your service or purchase your goods. Setting the wrong price point will leave customers decidedly unenthusiastic.
A price point set too high might give you a good profit margin, but it can also leave buyers thinking it is beyond their reach. A price point set too low might make buyers think that your good or service is sub-standard. Accurate pricing for your market is crucial for a successful business.
Business startups are a dime a dozen, and so many ideas -both good and bad- come and go in the blink of an eye. Putting in the time and energy to conduct proper market research will allow you to give your great business idea its best chance for success.
Getting to know your potential customers can only benefit you in the long run as you can tailor your business to their ever-changing needs.
Knowing what makes your business stand out from the crowd and then marketing it strategically to your customer base will save you time and money. Your drive and determination will give you the patience to conduct the research necessary to determine whether your business will be successful.
Your passion is what has helped inspire your great idea, but it is your entrepreneurial spirit that will ultimately make it successful.