How to Research Your Business Idea

Step One – Market Research

Market research is invaluable in determining your idea’s potential. Gather information from industry associations, Web searches, magazines,libraries, federal and state agencies, etc. This will help you to gain a general sense of the type of customer your product or service will serve.

Be sure to write out the objectives of the research. This way you will be sure to get the information you need to either go forward with your idea, revise it or to throw it out and start over.

Make up a list of questions you need to answer in your research. Then create a plan for answering them. This will depend upon the type of product or service you want to sell, as well as your overall goals.

You can use your research to determine a potential market, to size up the competition, or to test for the usefulness and positioning of your product or service. If your product is a tangible item, letting the target audience see and touch a prototype can be extremely helpful. You can also show prospective customers a detailed description or draft Web site.

Step Two – Analysis
ThinkL  company, customer, competitor and collaborator.

Here’s what to look for in each:

1. Company. Think of your idea in terms of its product/service features, the benefits to customers, the personality of your company, what key messages you’ll be relaying and the core promises you’ll be making to customers.

2. Customer. There are three different customers you’ll need to think about in relation to your idea: purchasers (those who make the decision or write the check), influencers (the individual, organization or group of people who influence the purchasing decision), and the end users (the person or group of people who will directly interact with your product or service).

3. Competitor. Again, there are three different groups you’ll need to keep in mind: primary, secondary and tertiary. Their placement within each level is based on how often your business would compete with them and how you would tailor your messages when competing with each of these groups.

4. Collaborators. Think of organizations and people who may have an interest in your success but aren’t directly paid or rewarded for any success your business might realize, such as associations, the media and other organizations that sell to your customers.

Also, consider the weaknesses of your product (such as design flaws) or service (such as high prices); and potential threats (such as the economy). This will enable you to quickly understand whether your product or service will be a success in the current environment.”
Step Three – Check Out the Competition
Become a customer of the competition, whether by shopping them yourself or by enlisting the help of a friend. Visit their Web site and put yourself on their mailinglist. If possible, talk to your competitor’s customers. Find out what they like or don’t like about your competitor’s product or service. An easy way to do this is during the Step One Market Research by including a question like ‘Where do you currently buy this product or service? Why?’”

Find out what your competition is doing so you can do it better. This will be your selling point. It’s going to be the core of your marketing program that sets you apart!