You might have come up with an awesome idea for a new business, and you’re excited to hit the ground running, but sadly, many amazing business ideas still fail to materialize — often because of a lack of validation at the very beginning.
When it comes to business success, there aren’t any shortcuts. It’s vital to put in the time and energy validating that your business idea isn’t just a great idea, but also that it’s viable and able to succeed.
There are a number of ways to test out your business idea, like asking friends and family for advice and seeking guidance from a mentor, but even if you do those things, it’s still critical to carry out market research.
Market research can include many different channels and methods, such as using a market research tool, running direct consumer surveys, and investigating local government statistics about your target market. Whatever market research approach you take, here is why market research is a vital step in business idea validation.
Verifying Product Demand
You might have the best business idea in the world, but are there enough people in your target market who are willing to pay for it? Remember, having a few people who love it is unlikely to drive enough sales to make your business viable.
Calculate how large an addressable market you need to make a profit on your product/service, and then find out whether that market exists. Sometimes, you might have the right product, but the wrong market. You could be aiming at the wrong age group, targeting the wrong geographic area, or have misdefined the business type.
Looking up monthly search volumes for keywords related to your product/service can help set you straight, so that you don’t mistakenly scrap the entire idea in the belief that there’s no interest.
Scoping out Your Competition
Finding out that you have competition is excellent news — it means that there really is demand for your product! But your work isn’t done, because now you need to learn all you can about that competition so you can out-sell them.
Look for both direct and indirect competitors, and explore everything about the product or service they offer. Ask questions like what is their pricing, how do they package the product, what sales channels do they use, and what kind of customer support do they provide?
Market research will reveal the strengths and weaknesses of their proposition, so you can position your product or service as being even better than theirs to capture their customers.
Speeding up Product Improvements
It doesn’t matter how good your business idea seems right now – there is always something you can do to improve it. It might mean something as minor as tweaking your pricing or as major as changing the materials you use, but whatever it may be, you want to find out quickly.
Once you’ve found them, you can fix the errors, pivot your offering, adjust your branding, and generally improve your business as fast as possible. Market research helps you reach a better version faster by revealing the flaws in your product.
It can be terrifying to actively search for the weaknesses in your business idea, but it’s far more nerve wracking to discover them through trial and error in the actual market.
Preparing Your Marketing Strategy
Perhaps you’ve already confirmed that there’s a market for your business idea and you don’t have any serious competition, but you still need to market your product in order to drive sales and revenue, and that requires a full understanding of your target audience. Market research shines a spotlight on their pain points.
Read: 6 Ways Local Business Can Succeed With Digital Marketing
If you want to hit the ground running when you launch your business, you’ll need an encyclopedic understanding of your target market’s true pain points and concerns, so you can refine your marketing messaging accordingly.
You’ll also need to know which channels to focus on for your marketing campaigns, which language resonates most with your potential customers, and which public figures they find the most influential.
Alerting You to Pitfalls in the Path
It’s important to thoroughly investigate the cultural, religious, and historical prejudices lying hidden among your target market, especially if you’re aiming at a geography or demographic that you don’t know intimately already.
There are all too many ways to unintentionally offend people by choosing the wrong business name, presenting the wrong image, or referencing a sore spot in their history.
One silly mistake in your marketing or product name can be enough to break your business before it even gets off the ground.
Market Research Can Help Your Business Succeed
Starting up a new business can be fraught with pitfalls, but the more market research you carry out beforehand, the better prepared you’ll be to avoid them. By learning about your competition, checking you have a sizable target audience, learning more about their pain points and sensitivities, and rapidly improving your product, you’ll be better placed to see your business succeed and thrive.
Read: 6 Must-haves For Successful B2B Website in 2022
Why Market Research Is the Key to Validating Any New Business Idea
You might have come up with an awesome idea for a new business, and you’re excited to hit the ground running, but sadly, many amazing new business ideas still fail to materialize — often because of a lack of validation at the very beginning.
When it comes to business success, there aren’t any shortcuts. It’s vital to put in the time and energy validating that your business idea isn’t just a great idea, but also that it’s viable and able to succeed.
There are a number of ways to test out your business idea, like asking friends and family for advice and seeking guidance from a mentor, but even if you do those things, it’s still critical to carry out market research.
Market research can include many different channels and methods, such as using a market research tool, running direct consumer surveys, and investigating local government statistics about your target market. Whatever market research approach you take, here is why market research is a vital step in business idea validation.
Verifying Product Demand
You might have the best business idea in the world, but are there enough people in your target market who are willing to pay for it? Remember, having a few people who love it is unlikely to drive enough sales to make your business viable.
Calculate how large an addressable market you need to make a profit on your product/service, and then find out whether that market exists. Sometimes, you might have the right product, but the wrong market. You could be aiming at the wrong age group, targeting the wrong geographic area, or have misdefined the business type.
Looking up monthly search volumes for keywords related to your product/service can help set you straight, so that you don’t mistakenly scrap the entire idea in the belief that there’s no interest.
Scoping out Your Competition
Finding out that you have competition is excellent news — it means that there really is demand for your product! But your work isn’t done, because now you need to learn all you can about that competition so you can out-sell them.
Look for both direct and indirect competitors, and explore everything about the product or service they offer. Ask questions like what is their pricing, how do they package the product, what sales channels do they use, and what kind of customer support do they provide?
Market research will reveal the strengths and weaknesses of their proposition, so you can position your product or service as being even better than theirs to capture their customers.
Read: Businesses Need to Prepare for these Rising Fraud Cost Trends in 2022
Speeding up Product Improvements
It doesn’t matter how good your business idea seems right now – there is always something you can do to improve it. It might mean something as minor as tweaking your pricing or as major as changing the materials you use, but whatever it may be, you want to find out quickly.
Once you’ve found them, you can fix the errors, pivot your offering, adjust your branding, and generally improve your business as fast as possible. Market research helps you reach a better version faster by revealing the flaws in your product.
It can be terrifying to actively search for the weaknesses in your business idea, but it’s far more nerve wracking to discover them through trial and error in the actual market.
Preparing Your Marketing Strategy
Perhaps you’ve already confirmed that there’s a market for your business idea and you don’t have any serious competition, but you still need to market your product in order to drive sales and revenue, and that requires a full understanding of your target audience. Market research shines a spotlight on their pain points.
If you want to hit the ground running when you launch your business, you’ll need an encyclopedic understanding of your target market’s true pain points and concerns, so you can refine your marketing messaging accordingly.
You’ll also need to know which channels to focus on for your marketing campaigns, which language resonates most with your potential customers, and which public figures they find the most influential.
Alerting You to Pitfalls in the Path
It’s important to thoroughly investigate the cultural, religious, and historical prejudices lying hidden among your target market, especially if you’re aiming at a geography or demographic that you don’t know intimately already.
There are all too many ways to unintentionally offend people by choosing the wrong business name, presenting the wrong image, or referencing a sore spot in their history.
One silly mistake in your marketing or product name can be enough to break your business before it even gets off the ground.
Market Research Can Help Your Business Succeed
Starting up a new business can be fraught with pitfalls, but the more market research you carry out beforehand, the better prepared you’ll be to avoid them. By learning about your competition, checking you have a sizable target audience, learning more about their pain points and sensitivities, and rapidly improving your product, you’ll be better placed to see your business succeed and thrive.
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