Launching a business can be one of the most rewarding things you’ll do over the course of your professional life. However, in all the excitement it’s easy to lose objectivity. It’s important to take a step back and take stock before ploughing ahead and squandering valuable time and resources.
Market research is critical in making those all-important decisions on where to position your business and ironing out any kinks. Here are some of the key steps you should be looking to take:
Crunch the numbers
The internet is a good place to begin kicking the tyres on your idea. How big is your target market and how would this translate into potential earnings? Check out trade websites for reports and statistical information, or you may be able to get the information you need from networking groups and business forums.
This data will help you to better evaluate whether your idea makes financial sense, and it can even form the basis of a future business plan.
Check out the competition
Chances are if your idea is worth pursuing there will be someone already doing it or something like it. Visit rivals’ websites to get the lowdown on what they’re doing well (and perhaps not so well). Download their annual reports and put yourself on their mailing list to get a better idea of their product range and pricing structure.
If you’re still confident your idea has legs it may be time to look for other people’s input. Set up an informal focus group with friends or family – ask them about what they like and don’t like about the product or their consumer habits in general. You could also run a survey over Facebook or LinkedIn to increase the size of your test group. The likes of surveymonkey.com are free and easy to use.
Try a prototype
Having passed the acid test, you can do what a lot of companies do, which is to put out a prototype product or service and test it out on a small number of people. This can be a great way to sand off any rough edges and put the finishing touches to your business. Don’t rely too heavily on close friends or family – you need people who will give you honest, constructive feedback.
Beware: navigating the market research stage requires a thick skin; be prepared not to like all the feedback that comes your way. Remember that it’s all valuable information and is likely to be saving you time and money in the long run. Even if your current project turns out not to be viable, going through the process will leave you better placed to tackle your next venture.