Do you have an idea for a product or service that’s not on the market? Or does it exist but you know you can make it better?
SCORE has partnered with Canon to create the “Simple Steps for Starting Your Business” program to help entrepreneurs. The program consists of five free online workshops and a downloadable workbook. To enhance the online class, we recommend working with a SCORE mentor to develop your individualized strategy.
The second course, “Simple Steps for Starting Your Business: Module 2 – Defining Your Business Concept,” details how you should evaluate your business idea by researching your potential industry, customers and competitors.
Creating a feasibility plan will help you decide whether you have a solid business idea or not. It also provides the basic information needed to complete a business plan for investors.
Examine these factors to determine the quality of your idea:
- Business concept: Is there a need for your product or service in the market? Does it solve a problem? What are the features and benefits? How is your idea better or different than your competition?
- Personal background: Do you have the skills or experience to create your product or service? If not, can you adapt your idea to better match your skills? Are you prepared to take a risk?
You’ll need to delve deeper into researching your industry, customers, competition and market trends to create a true assessment of your business.
- Industry profile: Take a closer look at the industry you want to enter. What are the growth trends? Is it a hot market? Research your industry in the North American Industry Classification System (NAICS) which is the standard system federal agencies use to classify businesses. You can also look at data from relevant trade associations.
- Customers: Narrow your company’s focus to a manageable niche audience. You can’t sell to everyone. How big is this market? Get to know your potential customer beyond demographics. Try to understand who they are. What are their spending habits? What is their income level? Where do they shop and live? How big is the market? If you are opening a local business, you must choose the best location to reach your target market.
- Competition: Understanding your competitors is critical to success. How many competitors will you have? How big are your competitors? How are they different? How much do they charge for their product or service? Where are they located? Do they sell online? What are their annual sales? What is their marketing strategy? Hoover’s and Dun and Bradstreet are excellent resources for market research.
- Pricing: Based on your research on customers, competitors and industry, you will develop a pricing strategy. Pricing your product appropriately can make or break your company. Will you offer a discount, market or superior price? Prices are not set in stone and always adjust according to market trends.
Developing a feasibility plan may be time-consuming, but examining all the details will refine your business concept and help you determine its potential.
Watch the entire “Simple Steps for Starting Your Business: Module 2 – Defining Your Business Concept” online workshop. Download the workbook and be sure to complete the entire program for the best preparation. Find a SCORE mentor to help you analyze your business idea.