Is there a market for your business?
Once you’ve come up with your idea, you need to make sure there is a market for it. Do this by conducting extensive market research – find out how many people would buy into your idea, what the competition is like and what your customers will be like. Will they be able to afford your product or service? If your proposition is badly priced, your customers will be decidedly unenthusiastic about buying from you. Make sure you look at your potential customers’ spending habits and earning power to determine how much – and how often – they will be willing to pay.
A simple way to conduct market research is to look at pre-published reports and statistics. These will provide data on how your market is performing, market trends, and may give you statistics on the average customer in your sector and his or her habits. Try searching The Office for National Statistics: The government statistics website has stats on almost everything.
Surveys are excellent sources of information and on campus you have a captive audience (unless students are not your target audience). Choose a time and place you know lots of your target customers will be around. It may be worth offering an incentive to complete your survey. If you can buy them a coffee while you talk to them or offer money off your product or service, they will be more likely to stop and chat. Don’t be disheartened if people turn you down, it can be tough but quality results are worth it.
One of the major causes of business failures is bad market research. While you may be enthusiastic about getting started straight away, conducting exhaustive market research is absolutely essential. Without it, you won’t have the information you need when you’re marketing and pricing your offering.
Figure out who exactly wants your product or service. Consider gender, age, profession, hobbies, income – a clearer profile will mean you can meet their needs more precisely. Research their lifestyles; where do they live, what do they do for a living, how old are they, where do they go on holiday, are they married, do they commute? This will help you tailor your product and marketing. Get demographics info from your local council. Think about where they live and how that would affect distribution of your product.
Spending habits will be a key decider in how to sell your product. Do your customers shop online or in person, impulsively or after lots of research into competitor products? Do they prefer independent shops or huge supermarkets? How will they find you? Look at how similar products are being sold to get a preliminary feel for consumer habits. Remember to consider less obvious competitors – online mobile phone top-up sellers are now competitors to sweet shops because kids spend their pocket money online and on their phones now.
Once you have collected data about your customers, you will need to break them down into different groups, or segments based on information such as age, income, region and lifestyle. This is called market segmentation, and allows you to determine specifically how you will encourage each group to buy into your brand.
Once you have segmented your markets, work out how you will position your business in the market in order to compete. What will your unique selling propositions (USPs) be? Do you make faster deliveries or better customer service? How will you let your customers know about it?
Do some preliminary research into suppliers and distributors – a bit of Googling, a few casual phone calls to potential suppliers, and ask other businesses in your sector.
Try testing the validity of your business by creating a landing page and seeing if your customers are willing to buy.
-> To book a meeting with a HIVE business advisor email firstname.lastname@example.org call 01227 82 4641 or visit this webpage: https://www.kent.ac.uk/enterprise/hive/advisors/index.html