Setting up a business is a challenging time, and in many cases, is the culmination of a life-long dream to go out on your own. However, it’s rarely as simple as transforming that dream into a reality. There are several key questions that need careful consideration before taking the first steps towards becoming a business owner.
People often get stuck answering questions that deal with practical issues, such as how much time it will take before they hit a profit, the potential scale of investment, the legal processes involved, and whether or not a physical premises is needed. While these questions are all key to a successful business, more fundamentally it is important to understand whether the concepts of your idea will work. You need to know whether or not your business plan is on the right lines. From my experience, people often don’t think enough about this when starting out.
Below are some key questions to ask yourself to ensure you fully understand the industry and the market that you are entering into.
What does your industry think about your idea?
You need to ask yourself if your idea appeals to the wider public. Firstly, is it of interest to those outside of your circle of friends and family? People you don’t know must be able to see the merits of your idea. Getting impartial advice and feedback is vital, and there are plenty of places to find this. If you’re not sure where to begin, StartUp Britain is a good resource that allows you to find local support organisations offering advice to start-ups. Industry events, exhibitions and conferences will allow you to speak to experts in your field and gain insights into the process of setting up a business. Speaking to those already involved in your industry will also give you the opportunity to test your idea and receive objective feedback early on. These events will also allow you to find, and better understand, the buyers and sellers in your market. Building relationships and contacts in these areas will be invaluable.
What do potential customers think about your idea?
Another important question to ask yourself is whether you fully understand the needs of the audience you will be targeting in the future. Qualitative research is a good way to do this. It involves understanding the opinions and motivations of others, and will improve your understanding of your potential customer base.
Online surveys are a good way of reaching a much wider part of the population than you would be able to do otherwise. These types of surveys also give you the opportunity to tailor your questions to the right markets, in order to gauge further interest in your business idea. The audiences will be anonymous and impartial, giving you a good indication of the appetite for what you’re planning to sell. The two best online platforms which allow you to gain this type of online feedback are Google Customer Surveys and Survey Monkey Audience.
Have you tailored your product or service to the needs of the market?
The third area you have to question is the product or idea itself. You must have a full understanding of your product in order to base a business around it. Key information to investigate includes how much people are willing to pay for your product, whether there is an appetite to move away from larger competitors, and if consumers have any desire to travel for the service or product you are offering.
Google Trends is a good tool to use to gain such insights. It can help you identify particular niche areas of the market that are emerging, which can help you tailor your products or services.
Have you thought about the other brands in your market?
Asking questions about the existing players in your market will allow you to better visualise where your idea will fit in. Google Alerts and Twitter keyword search are both useful tools that allow you to find out what people are saying about your competitors on social media. If you know what they’re saying, and perhaps where they fall short, it will be easier to understand where your brand fits in.
You need to ask yourself what makes your product different to everything that is already on offer in the market. The answer to these questions could be based on your pricing, your geographical locations, or the level of service you plan to offer.
Have you refined your idea?
Finally, you need to ask yourself whether or not you have fully refined your idea. The suggestions above will allow you to have a comprehensive overview of your product, the appeal of your current business plan, the attitudes of your proposed customer base, and the existing market, and the appetite for a new player. This wealth of data is invaluable when setting up your business.
Listen to all the feedback from friends, strangers and the surveys and use it to change your ideas. Make sure your proposed business plan is supported by the facts. Modify it, make it better and adapt it.
Nick Leech is group marketing director at Host Europe Group.