When you are starting a new business idea, you need to test your business idea thoroughly before the launch. If your new business is going to succeed, there must be sufficient demand for your products or services at the prices you intend to charge.
How to do basic market research
Market research doesn’t just mean clipboards, questionnaires and people pestering shoppers on a busy high street, for most small businesses the solution is much easier.
Maybe you can spot a gap in the market and tailor your business to fill that niche, this means you become the number one supplier within that market. Or if you plan to sell something that’s already proved popular, you should still carry out market research to seek honest feedback from potential customers.
To pre-start market research, all you need to know is who your customers are and what they think about your products or services. You should speak to potential customers you don’t know. Find out their opinions about what you plan to offer. Do some real-life product testing. Make sure you ask whether they’d buy your product/service at the price you’re asking. If the answer’s no, you need to reconsider.
Effective market research involves a lot of assessing the competition and web-based searches are a good place to start. Other ways you can check out the competition are business directories and local papers/magazines (for marketing purposes). Even walking around the area in which you’re thinking of setting up will reveal the competition you will face. Find out how many businesses in your market offer products/services similar to yours. Determine how much they charge and what terms they offer (eg buy now, pay later, etc).
Assess your findings
When it comes to the results of your market research you should always check the feedback. Never ignore people who tell you they don’t like your products or prices. Ask what they would prefer you to sell and/or how much they would pay. This way important flaws in your business idea could be exposed, but it’s better to find this out before you commit time, effort and money to starting a new business that may never succeed.