A majority of small businesses fail in the first five years of commencement. Many businesses collapse simply due to lack of customers to buy their product or services. Most entrepreneurs and small business owners start with the strategy “build it and they will come”, while many others concentrate more on products rather than their potential customers. It’s better to avoid venturing into business that’s doomed to fail. It doesn’t matter how much knowledge, personality and drive you bring to your new business, if people don’t want to buy what you are offering at that price, the business is sure to fail.
All business giants were once entrepreneurs who dared to venture into the unknown. The first step in the right direction is first establishing if the product or service you wish to sell will have any takers in the market. It’s great if you think you have the next best things since sliced bread, but if no one wants to buy it, it really doesn’t matter how good your product or service is.
You can avoid a possible business failure by simply conducting market research to assess the potential demand for your product or service. As a first step ask yourself a few questions first.
- Will your product or service satisfy the market’s need?
- Who will be your potential customer and where can they be found?
- What type of competition will you face? Direct or indirect, local, national, or international?
- How distinct is your product or service from the one already in the market?
- Can it survive the changing customer choices and trends?
- Will customers buy your product or service at your desired price? If not then at what price will they buy?
Next in line is to do an actual market research. The key to success can be to spot a gap in the market and tailor your business to fill that. You have to know who your customers are and what they think about your product or service. Never ignore feedback on prices and especially those on product or services that are similar to yours.
Using Google and other search engines can be an effective way to gauge the potential market for your idea. You can do a simple keyword search to see if your idea already has a demand. Also flick through the pages of business directories and local papers/magazines. If there are many competitors or some whose prices you cannot match, your business idea might not be viable.
Your market research results might just indicate that your business idea isn’t viable. Do not be disheartened. Remind yourself that you’re better off knowing now rather than later, when you’ve already invested a substantial amount of money into your business. Market research might also point out the flaws in your business plan, giving you a chance to work on it.
The benefits of market research are many, not the least of all being the ability to provide valuable insight into the feasibility of your business idea.