So you think you have come up with a winning business idea. Do you find yourself telling anyone who will listen about the merits of your product? I’m sure you are already dreaming about that big day when you can quit your day job. But are you ready to go it alone?
Coming up with new business ideas is easy. But the hard work that follows can stop budding entrepreneurs in their tracks. You actually have to start taking action and get the ball rolling with your business idea – dreaming about it doesn’t count! So it’s time to conduct a little market research for your online business.
I find that gut instinct and logic go hand-in-hand when planning an online business. First I have a gut instinct that an idea will work, and then I do some market research to substantiate that instinct. As I continue with fact-finding and research, logic starts to take over from my intuition. It’s a combination of heart and logic that helps me to assess the merit of a business concept.
Before taking the plunge, you will need to do some market research to assess the viability of your idea. Many web entrepreneurs struggle at this stage because they want to find a business idea that is guaranteed to succeed. My own experience has taught me that taking action with a pretty good idea is better than waiting until you have a perfect plan.
So let’s do some market research to assess the viability of your business idea.
What is your market?
First, determine what market your business is in. Start with the broad market and narrow it down further from there. There will be many sub-markets within your broad market, and you are looking to identify which of these sub-markets your business will service.
I like using the Q&A approach to narrow down your market. Have a partner or friend ask you questions about the intended market for your business. Who are they? What do they want? What do they do? Answering their questions will soon make it clear what market you are aiming for. Continue the Q&A process until you clarify your sub-market(s).
The traditional approach in the brick-and-mortar world is to spend time on R&D developing your product, and to then look for a market. When starting up an online business, it is usually better to assess whether there are hungry customers in your market, and then develop a product for them.
Here is a list of good resources to get those creative juices flowing when brainstorming a business idea:
Chat in person
I know it’s a novel concept, but even as a web entrepreneur, it’s a good idea to step away from using the Internet and chat to others face-to-face: your family, friends, colleagues, and business peers. Whenever I visit my local cafe or restaurant, I take the opportunity to chat to local business owners. I enjoy asking about how business is going and talking about everyday things in that person’s world. That’s my approach to informal market research while I enjoy a coffee at my local cafe!
Books and magazines
Go to your local or online bookstore and browse the books and magazine categories. Look at the kinds of topics that are showing up in the best seller’s list, scan through magazines, and read articles to stimulate your own thoughts and ideas.
I like to use a tool like Google Trends to investigate trends in your subject area. Google Trends indicates the search volume and key news items, by region and by language. Ask yourself the following questions: Has the topic been trending up or down in recent years? Is it a product that has seasonal trends? What are the hot topics and hot searches occurring on the Internet?
Google Insights for Search, which is currently in beta mode, is another useful tool to use. Google Insights is an advanced tool that is able to provide more detailed information about search terms, geographical information, and seasonality trends.
Between the two, I find Google Insights a more useful tool over Google Trends.
43 Things is a social media site whose community has a focus on sharing each other’s goals. I enjoy browsing 43 Things because it’s sociable and light-hearted, while still triggering a business idea or two.
Springwise has spotters scanning the globe for smart new business ideas to help entrepreneurs come up with inspiring plans. I enjoy browsing Springwise to get my fix of entrepreneurial brainwaves in a range of industries and to keep up with the latest in innovative ideas.
Get to work
Coming up with a great business idea was only the first step. Now it’s time to take action and research your potential market. When you really understand your customers and their needs, you’ll be that much closer to launching a successful business.