The first in a series of 10 posts explaining the steps entrepreneurs should take to bring their innovation or business concept to fruition. This article series will walk entrepreneurs through; how to perform market research, selecting a business entity, everything you need to know about establishing a web presence, how to set up your website, myths and facts about SEO marketing, traps and then conclude with a list of available free and paid resources to ensure success. Even if you already have a website, the information presented will help new innovators as well as current business owners achieve greater success by showing you how to correct poorly designed websites.
Thinking Through Your Idea Recap
Previous series such as How Ready Are You To Become A Business Owner and Raising Capital Best Practices make sure that you have thought out your business opportunity and have a strategy going forward. Too many good ideas go to waste because entrepreneurs become too excited to think clearly and rush into action wasting valuable start up resources. Just as importantly, we have seen far too many otherwise intelligent people fail to admit their mistakes and adjust or re-think their opportunity. The mark of an entrepreneur is the flexibility to change and find something that works. Reviewing these series will give you a starting base for the next section.
The Entrepreneur’s Checklist – Market Research
The first post subject is performing market research. Market research provides you with crucial information required all along the planning and execution stages. There are 4 times to perform market research. They are as follows:
- Idea generation. Market research is done to validate the opportunity by establishing a definitive need that the opportunity will address. For example, let us say you have discovered a new potential fuel source. Market research is performed to identify the size of the market, competitive products, how your idea is better than the competition or can be delivered more effectively. Standard research tools may include: technical journals, USPTO, internet searches (search engines, article databases such as lexisnexis, market research etc.), professional associations and personal knowledge.
- Business plan generation. As discussed in the Raising Capital series the market plan is used to detail how you will achieve your revenue goals. For example, how many leads will it take to generate a sale. There are a numerous methods to market including direct sales, retail stores and internet marketing. Market research for your business plan must include a competitive analysis (there is ALWAYS competition) as well as how the marketing efforts will be funded.
- Establishing an Internet presence. Establishing an internet presence is a must and not an option for virtually every new or existing business to market their products or services. Failure to do will severely limit growth possibilities as more and more people conduct an internet search to identify the goods and services they need. Market research is done here to identify the best suited web or blog site to use as well as a marketing strategy. A poorly designed site can make you look out of touch, fail to draw lead producing traffic and create a negative image. The 4th post in this series will help you determine the best type of presence you need.
- Growth, expansion and the passing of time. Most new businesses begin as a micro-enterprise, and when successful face a myriad of challenges from sustaining the growth to professionalization. Anytime monies are to be allocated for growth endeavors, the business plan (including marketing plan) should be revisited to confirm viability. In addition, all businesses should periodically examine their market research to identify changes, new competitors, trends and marketing plans.
How is Market Research Performed?
The steps for doing market research will vary depending on the type of business you will be creating. For example, an established professional practice may only need to research web designs and keywords where a new business based upon intellectual property will start from the beginning. The steps below may not be applicable to all but will give you a good starting point.
- Identify your market niche using professional databases, internet searches, government trade statistics, professional associations, colleagues, friends and so on. Some of the most popular products on the market were not their intended use so make sure you are open to other applications. Determine what your target market is, the size of the market, where the market is, competition and your overall marketing strategy.
- Identify the vehicles to be used to implement your business plan. How will your micro-enterprise generate business and what is the cost/benefit of each marketing strategy? How many sales people or leads will you need to make a sale. Talk to people in a similar type of business or to someone who has had experience in your industry. This part of market research is very numbers oriented. Have realistic expectations for your micro-enterprise, never assume a percentage of market share as you must be able to justify capital investment (your own or others).
- For each marketing vehicle you choose, do further research into the options that are available. For example, a direct sales approach requires a different marketing approach than a internet marketing strategy. Options may vary from establishing channel partnerships to internet sales only to a joint venture. Do your homework on every company or method. The Internet, local trade or professional organizations and industry journals are a great place to start. Research is also a good way to start gaining exposure for your business.
- Pay attention to the search parameters you use to do your research. These same parameters may be the keywords you will want for establishing a web presence.
- As the business develops, talk to leaders in your industry to identify trends as well as discovering more effective marketing techniques. You do not have to re-create the wheel if copying a successful marketing strategy can work for you.
- Lastly, as a caution, if you are developing a business based upon intellectual property that needs to be kept hidden then be careful how much information you divulge to others. A non-disclosure or confidentiality agreement is useless if you do not have the money to pursue a claim or someone can beat you to the market with a similar product.
As previously mentioned, market research is done as part of the idea formation and business plan development. Once completed the next step is to begin execution of your plans. For most people this means selecting the appropriate type of business entity. The next post will discuss the differences between a Sub-chapter S, Sole Proprietorship, Partnership and a full fledged corporation.
Share with us your market research successes so others can benefit. If you liked this article you may also enjoy reading: