The First Right Step towards Building your Business Model:
Evaluate if your idea or product has a market – Need Assessment
You think, feel and believe that your idea or product is going to revolutionize the industry and bring in disruption and it is unique in its proposition : That’s Great News
However – Does this idea or product have the market?
An Analysis:Just having a great idea for a product or service is not enough (acting on instinct, though a big part of business), it should not be the only thing one considers while trying to enter the market. A product may do well in one market but may not be adaptable in the other. This could be due to the various economical, cultural or behavioral factors of the new market.
Before embarking on your business journey and going all out on your idea and investing your life savings, you should determine whether there is really a need or demand for your offering. This can be done by conducting market research.
Market Research is an important process and is crucial while planning to introduce new offerings or enter new markets. Many entrepreneurs skip market research as they are afraid of receiving negative feedback. Some entrepreneurs forego market research as they fear it may be too expensive. However, the truth is entering the market without a clear view may end up costing far more than what a market research would have. Consider market research to be an investment for the future success of your business.
Ways to Conduct a Market Research: You can either do the market research yourself or employ an agency to do it for you. If you plan on conducting it yourself, it is a good idea to seek the advice of a consultant or a business/marketing professor who will help you identify the information you need to gather. Research could be Primary or Secondary. A good market research is based on the clear-cut scope and covers amongst others:
Current trend in the Market: A research on the industry will provide you data on the industries current position in the market, i.e. if the industry is currently growing and by how much, if any technological developments are benefitting the industry, any new laws hindering or benefitting the industry etc. It essential to enter a growing industry and not one that is on a decline.
Consumer Behavior / Preferences :Every product or service offered by a business needs to cater to a particular set of customers/ clients. Research will provide insight into the behavior of consumers. It will help understand the tastes and preferences of consumers, their spending patterns, their purchasing patterns etc. This will help establish your target market.
Competition / Competitor Analysis : Looking into your competition will help evaluate their offerings and help you position how you can stand out from the rest. Understanding how competition is currently performing will also provide you with information on how the companies in your industry are performing.
One must keep a keen eye on not just current competition but must also be wary of potential competition that may rise in the future. If the offering is a service, concentrating on local competition maybe enough but, in case of a product, international competition (like countries exporting similar goods to your country) should also be considered. One can also learn from the mistakes and successes of their competition.
Learnings from the Research: Based on the Market Research – you will be able to take a conscious decision and enter into your business fully mindful and aware of the opportunities, limitations and challenges you may encounter so you dive deep into the Business waters, armed with all safety gear to reach your destination. A Successful Business venture.