Step 4: Conduct Market Research
The Concept:
Compare your product or service to those of competitors already in the market.
What you need to know:
Investors and lenders will insist that you know your target market so well that you can recognize a customer walking down the street. You gain this knowledge through market research. This is the link between your mission statement and your marketing strategy (next step). You’ll need to demonstrate a familiarity with your competitors, their products and overall industry trends. You’ll need to ascertain lifestyle issues, motivations and buying habits of your target market as well as potential customers. You'll need to understand age groups, income ranges, education levels, geographic locations and other factors. Analyze your business proposal by creating a "SWOT" list of Strengths, Weaknesses, Opportunities and Threats. The more you know, the better you'll understand whether your idea is on the mark or needs adjustments. Many companies hire market research professionals so you may want to identify research expenses up front.
Points to consider:
What makes your product or service unique?
Who would buy your product? How often? What quantity?
Who is your competition?
What are industry trends and the size of potential markets?
Do market findings indicate a need to change the product or service you offer?
When do customers buy? Is your product or service a seasonal one?
Are there international opportunities to sell your product or service?
Are there Internet opportunities to sell your product or service?
How will clients access your products or service?
Is there sufficient demand for your product or service given the marketplace and competition? Does your market research indicate a need to change the product or service you offer?
Should you continue pursuing your business idea? Should the idea be adjusted?
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