Is Your Idea Feasible?
Now that you have looked internally, it is time to do an external assessment by conducting research. The first area to think about is the industry; determine trends, conditions and opportunities. Pull together facts and figures for sales and profitability, the impact technology is having and will have for your business, determine legal and regulatory issues for the industry, economic conditions and geographic or seasonal factors.
When performing market research, it is important to analyze your market segments – very specifically define your target audience.
- Are you going to target males or females?
- What income class will your business aim to please?
- How old is your target audience?
- What do your target customers want to buy
- Where and when are they buying?
- How or why are they buying?
Think about your target market’s emotions and determine the problem you are solving for them. Once you have fully defined your target market, determine the size of the target market – are there enough people in the target to make your business profitable? Also how much is it going to cost to reach the audience?
Next, a prospective business owner should investigate the competition. Who are your competitors – think about direct and indirect competition. Think about where your competitors are located and determine their strengths and weaknesses. Moreover, what are your competitors’ products and services?
Once you have finished your market research, you will be able to evaluate the
- Product – address customer expectations, needs and problems and highlight the features and benefits your product provides to fill voids and solve a problem.
- Price – determine the basis for price by knowing your customers and competition – develop a pricing strategy.
- Place – evaluate your distribution methods and determine a location.
- Promotion – identify potential strategies and costs for reaching your market. Also determine a company image.
There are several organizations that can assist with market research and feasibility studies. Use the Resource Navigator, to find contact information for your local chamber of commerce, economic development council, local libraries, trade publications, U.S. Bureau of the Census and many more!