You need to research your target market and your competitors carefully.
A common misunderstanding is that business owners who have failed simply lacked enough funding or did not put the right team in place. In many cases new businesses fail because they have not spent enough time researching their business idea and its viability in the market.
There are certain criteria you can use to establish this. Think about your market, whether you will serve South Tyneside or further afield, and maybe an online customer base, while considering:
- Does your product or service fulfil or create a market need?
- Can you identify potential customers?
- Will your product or service outlive any passing trends or capitalise on the trend before it dies away?
- Is your product or service unique, distinct or superior to your competitor's offer?
- What competition will your product or service face - locally, nationally and globally?
- Is the product safe?
- Does your product or service comply with relevant regulations and legislation?
- Can you sell the product or service at a price that will give you enough profit?
Market research can play an important role in answering many of these questions and increasing your chances of success.
How much research you do will depend on the time and funds you have available. You could:
- Informally canvass the opinion of friends
- Talk to industry contacts and colleagues
- Survey the public about whether they would use your product or service
- Ask customers of competing products what improvements they would like to see
- Set up focus groups to test your product or service
- Monitor what your competitors are doing
- Look at what has and hasn't worked in your industry or market niche
- Study wider economic and demographic data
The more information you have, the better placed you will be to make your business idea a success.
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