| By Arnold Sandness, SCORE Counselor
You have a fantastic idea for starting your own business. But, will others get excited about it too? Who will find that it meets their needs or desires? Business ideas can appear in many forms, but all ideas need to be analyzed to help make decisions that will increase your chances of success.
The first step in researching your idea is to gather data to understand the market and demographic details. Who is your potential customer? Good market research can give you the answers and help you create a solid basis for intelligent planning. So, how do you proceed? Below are some simple steps to get started.
1. Identify the value of your product or service to potential customers. Why would someone buy your product or service? Who will be your potential customers? Where are they? Who is your competition? How do they market their products? What advantage will you have?
2. Assess the characteristics of the market. Is it business-to-business or consumer-oriented? A realistic assessment of the market must include its size, location and competitors. How do you find all the right information that can help you make business decisions? You need to use standard market research methods such as surveys, interviews, focus groups and test markets. Using these different methods is covered in Part 2.
3. If you have a product or service that you plan to sell to businesses, list the types of businesses that are potential customers and get company names and locations from the reference books in main libraries or the Internet. One standard reference guide for business information is the Thomas Register. Two good examples of Internet databases are Reference USA and Standard and Poor’s Net Advantage.
4. If you plan to sell directly to consumers, analyze the consumer market. This is usually more complex than the business market. Research demographics including population, age, sex, location, income levels, housing and purchasing patterns. In addition to the Internet resources mentioned above, you can refer to statistics from the U.S. Department of Commerce and Census data.
But do not stop here. Read Part 2 on Analyzing Market Appeal. And remember, for help with market research or evaluating your great idea, consult with a professional. Seek help from your nearest SCORE office or online counselor.
Arnold Sandness spent his 33-year career as a marketing executive at General Motors, Delco Products Division. After retiring from GM, he became a marketing consultant until 1995 and joined SCORE in 1996. Arnold has been a SCORE leader at the chapter and district level, and served for the past three years on SCORE’s Marketing Advisory Council, which represents the field in regards to SCORE’s national marketing effort. Under Arnold’s leadership, the Dayton, Ohio SCORE chapter was named 2002 National SCORE Chapter of the Year.
Brought to you by SCORE "Counselors to America's Small Business"
Ask SCORE
|
