How to research your business idea

How to research your business idea

Have you got a business idea that’s burning inside you?

And you’re sure it’s gonna work because it’s so brilliant? Nothing wrong with some passion! But there’s also a real need for objectivity too. This because, unfortunately, 80% of businesses fail and you can be sure that 100% of those entrepreneurs were as convinced as you are that their business idea was brilliant too! 

So how can you research your business idea and avoid your business crashing? Let’s have a look…

What you should consider BEFORE you venture out on your own

1. Understand your product/service. What are the features (physical attributes, for example weight loss pills that suppress your appetite) and benefits (what does it allow your customer to do. For example, weight loss pills enable your customer to feel sexy and confident.
2. Understand your market. Who is the product or service for? Know everything about them – demographics (age, sex, income, education etc) and psychographics (attitudes, needs, wants and what keeps them up at night!). Think about your direct customers (those that will purchase your product/service), their influencers (for example, parents, teachers or company financial directors, and the users (sometimes the people that buy the product are not the users as in many children’s products).
3. Speak to your target market. Find people that match your target market and ask them what they think and how they feel about your product or service. You can do this with the use of surveys or by holding a focus group (getting people together in the same room and allowing them to discuss your product or service). This part needs to objective so you can’t lead them in any way or skew the responses. If you can afford it, get a market research company to do this research for you. Delve deep into their minds, find out which other similar products and services they use, what they like about them and what they don’t like. Ask them what’ wrong with your product or service. This will give you an opportunity to develop it right from scratch as opposed to having to fix it afterwards.
4. Research your competition. What are their products/services like, how much do they charge, where and how do they market their products and to whom? If you can get a closer sniff, find out who their suppliers are, what market share (how many customers) they have, what works well for them and what hasn’t worked. The best tool for researching competition is the Internet and if you can speak to anyone that works at the company, this will add a lot of value.
5. SWOT Analysis: Once you have the information from the three steps above, do a SWOT analysis. This is when you list your product or service’s strengths, weaknesses, opportunities (the gap in the market) and threats (e.g. the economy, exchange rate etc). It allows you to consider the broader environment in which your product or service will be play in.

From this analysis, you will be able to put a plan together to tweak the product (or leave as is), develop your marketing and plan your launch. But, remember, the reason you went to all this trouble was to establish if your idea will work. If the research is telling you the product or service is not viable, either fix it using the intelligence you got from the research or can it. It will be a lot more painful later if you invest your hard-earned money in a failed product or service.