Research and planning are vital to ensure that your business idea is viable and that your pricing is both competitive in your market place and provides an adequate return.
A common misconception is that entrepreneurs who have failed simply lacked sufficient funding or did not put the right team in place. However, many fail because they have not spent enough time researching their business idea and its viability in the market.
Lack of in-depth market research
Lack of proper market research is one of the key problems for new businesses. It's easy to get carried away with a business idea and set up a business without testing its viability. Accurate market data will help prevent over-optimistic forecasts.
For more information, see Market research
Keeping your business ideas to yourself
Failing to share your business ideas with people you trust means that you will miss out on objective feedback.
Brainstorm with other colleagues to give you valuable perspective. Note down any good ideas you get from brainstorming and use them when developing your business.
If you want to keep your ideas confidential, consider using a non-disclosure agreement, also known as a confidentiality agreement. This is a legal contract between you and another party not to disclose information you have shared for a specific purpose.
Not knowing your clients or marketplace
If you do not complete adequate research, you are in danger of selling to the wrong people or of not understanding your marketplace. To avoid this:
- Use information, such as free government data or your own network of contacts
- Carry out field research to explore customers' profiles and discover buying trends
- Swap ideas with people in the same sector
Weak financial planning