How to Research Your Business Idea The Right Way
Every business starts with an idea which needs to be thoroughly researched and planned before taking the big step of entrepreneurship. Whether you came up with the proposal or got inspired by a similar venture, it must be evaluated in detail to determine that you have chosen the right path. The financial risks associated with a start-up and purchasing a profit-making business for sale in New Zealand makes it imperative to take up the assessment and analysis of the idea.
Moreover, it is necessary because you will be leaving your secure job to start something new. Also, sometimes you are so obsessed with the idea that you may find everything else irrelevant. Since your future depends on the viability of the venture, you must undertake market research to ensure that the business has potential and is primed for growth. Here is how you can start the research work.
Understand Your Target Audience
When you have decided the goods or services you will be selling; you must also know who will be interested in buying your products. You will have to create a customer profile which will include both psychographic and demographic elements, such as age, gender, education, occupation, buying behaviour, economic background, etc. The geographical location of the target market will be helpful in deciding the place where you need to set up your business.
Once you have the location, then you will have to evaluate the market for its size and the presence of competition. The market research part will require preparing questionnaires for surveys and conducting focus group discussions with this target segment to assess the need for the product being introduced.
Create A Unique Selling Proposition
It is quite possible that when you start researching the market, you will come across other sellers who are providing similar products. However, this should not deter you from entering the market, if it is not saturated. It will help you because the buyers are already in need of this product.
To outsmart the competitors, you will have to include unique selling points in your product which will help customers to view it as a better version of the existing product. It should give a competitive edge to your offering and make it stand out in the crowd of products that are more or less alike. This differentiation helps in creating a brand identity and positioning the brand in the market.
Study The Competitors
It is one of the most significant steps in the research process wherein you will have to study the competitors in depth. You can start the process through online research by assessing the company websites and their digital presence. You can ascertain the popularity of the brand by checking the number of followers in social media profiles, website traffic, Google reviews, etc.
Besides these, you need to understand how the customers perceive these brands and question them about what they like and dislike about their products. After you have gathered all this data, you can carry out a SWOT analysis of each competitor to gauge their capability. Also, you will have to take a close look at their market strategy and how they are persuading the buyers.
Every business is dependent on capital and investment. So before you jump the bandwagon, you need to determine the costs involved in all the processes that will help you to commence trading. Whether you are looking at a start-up or an existing business, you will need money to initiate earning. The advantage with an established business is that you will be asked for a definite amount as the initial investment, and you can discuss the expenses involved with overheads and running the business with the outgoing owner.
However, in the case of a start-up, you will have to meet entrepreneurs and industry veterans to understand the costs associated with the establishment of the business. After you accumulate the financial data, you will have to find funding sources like bank loans, money lenders, etc., to meet the demands of the venture. If you cannot secure the required amount with decent working capital in your kitty, then you will have to rethink your business idea.
Write Your Business Plan
A business plan is the first step towards setting up a business. It will assist you in evaluating the risks and help you in establishing your long-term and short-term goals. It is the roadmap that will help in your quest for success. It can prove beneficial for getting business loans and funding.
It should include the description of the organisation and its mission and vision along with the market research data collected by the entrepreneur. It will have details about the competition, short-term goals and long-term objectives, marketing strategy, things to be included in the budget, and financial forecasting for the first three years.
Pricing The Product
Next, you need to decide the pricing strategy. You must price your products competitively as a too low or too high price will not attract buyers. You can always alter the price after you have penetrated the market. Also, the pricing will affect a lot of other factors, such as the time taken to reach the break-even point, initial investment amount, salaries to employees, and the entrepreneur’s salary. So make sure you have kept all other expenses in mind when deciding the price of the product.
Testing Your Idea
The last step of your research process should include testing the idea in the actual market before taking the final plunge. For this purpose, you can create a sample of the product or offering and make your target customers use it.
You must get customer feedback to know if you have been able to meet their desires and created a product that is better than others which are already available in the market.If they offer critical feedback, it can be utilised to alter the product and make changes to it. You need to create the best version of the product to ensure that it gets accepted quickly and with ease.
Thus if you are planning to acquire a business for sale in New Zealand or launching a start-up, then you must gather information from as many sources as possible and keep improvising the plan to come up with a foolproof idea that will click with the audience. It will keep you focussed and guarded against the challenges faced by other entrepreneurs.