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If you've seen Dragons' Den, you will know that thinking there is a gap in the market that you have the expertise to fill is no substitute for doing your research. There is nothing more discouraging than finding out there is poor demand for a product or service that you believed was invaluable.
But with some good research, common sense and time spent identifying your unique selling point (USP) you will be well armed to succeed in a highly competitive marketplace.
Your business proposition may be a new invention, or a new product or service, or even an original idea or solution to an everyday problem. Or it might be a variation of a product or service that has already proven highly popular.
Finding the USP
For many entrepreneurs, their new business venture is related to the work they already carry out, or an interest or hobby that they can turn into a business. The USP (unique selling point) may be their expertise and what they personally bring to the business in terms of relevant experience and expertise.
Alternatively, the USP could centre on the product or service itself, serving the need in a more efficient, innovative or attractive way. It could even be the means of delivery, or the price and package surrounding it.
Gauging demand
Whatever your business is, it is worth trying to find out whether there is a worthwhile demand for it. This research can begin with friends, family and colleagues by asking them to be honest and critical, as well as encouraging.
Also, it's worth asking whether there is a demand for the product or service you're offering either locally or nationally. It generally takes a lot of work to create an appetite for a product or service for which there is little demand, so if you're having to do a lot of convincing, this could be an indication that your product or service will bring in disappointing sales.
Another good question to ask is whether similar types of business failed. If so, why did they fail? Again, it is worth being dispassionate about your product or service and seeing it clearly from the potential customers' point of view. Also, what makes you think you can succeed where others haven't? There is generally a good reason why similar types of business failed, although finding out the cause could help you to hone your business armed with that knowledge.
As you discover whether or not there is a real need for your business, you need to ensure there will be customers who will pay for it. How big is the market and how will you reach it?
Who are you up against?
In addition, it is critical to identify your main competitors. Many businesses take short cuts in researching the competition, but the chances are they will have asked many of the same questions you are now asking. You can also be sure that they will evaluate your business as soon as you arrive on the scene.
By checking your competitors' product or service and their own price points and USP, you may discover how you can differentiate your own offering and boost the demand for your competitive solution.
Useful links for further information:
Related information:
Putting together a business plan - even if you're not seeking investment, creating a business plan can help you stay focussed.
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