Here is a great blog for anyone looking to start a new business! Â Before you throw yourself out to the wolves, check out this great blog by, Matthew Toren, and make sure that you are really ready to get started! Â If there is anything we can do to help, please let us know!
You have your idea sketched out and finished all of your initial analyses. Youâ€™re getting excited about having a potential money-making idea, but now itâ€™s time to test that theory: How many other people on the planet think that you have a good idea? How many will pay for that idea?
The value proposition has one flaw. It predicts the acceptance of your product or service by the average consumer within a climate of similar products or services. It doesnâ€™t tell you how many people will accept or desire it. Market research and testing are two ways to get a sense of those numbers. Hereâ€™re some tips and tricks to researching your idea before moving on to the next step.
Mainstream versus Niche
If your product is a new take on a common idea within a market, researching its value will be easier. Letâ€™s say youâ€™ve developed a new kind of sock designed for runners. The sock gives better support to the foot while running. Most runners wear socks, so you can do some research as to how many people take up running every year, how many drop out, and the percentage that purchase clothing to enhance their running experience.
Thereâ€™s a lot of history about people buying socks. But what if your idea is on the fringe and there isnâ€™t much data related to the purchasing habits of customers who may want your product? You may be absolutely committed to the belief that people will want your product, but how do you seek out an unbiased truth? Trials and focus testing are the best way to estimate market response.
Know Your Customer
You believe that people will want your product, but who are those people? Go to the mall, trade shows, and anywhere else people may purchase your product. Watch people as they inspect wares and take note of their decision-making process. Make a list of attributes and take notes as to who the particular person is that would buy your product. Your list may include the following:
- Â Age
- Â Gender
- Â Marital status
- Â Amount of time spent on their purchase
- Â Amount of money spent on their purchase
You may have to guess at some of these items, but things will become clearer later in your process. Youâ€™ll also create more criteria to examine as you observe more and more situations.
Get Product Feedback
This step will be much more successful if you have a prototype of your product. If not, then make several eight-by-10-inch photos and some postcard-size photos of your product from several perspectives. Find trade shows, expositions, farmers markets, and local stores that will let you set up a little table where people can stop and see your product.
This is your chance to test your salesmanship and to seek feedback from potential customers. What do they think of your idea? Youâ€™ll have a revised list of criteria with items on it such as the following
- Â Whatâ€™s the most important aspect of this idea for the customer?
- Â What are the decision criteria that the customer uses when purchasing this kind of Â Â Â Â Â Â product?
- If undecided, what feature in the product would make the customer purchase it?
These questions will give you some insight into the thought processes and buying habits of your typical customer.
If your idea is in the prototype phase, then it will be well worth the cost and effort to get your product into the hands of customers to receive feedback. Some may consider this an expensive step, but itâ€™s far less expensive to make 100 examples of your product for testing than a warehouse containing 100,000 units that nobody wants to buy.
The Customer Is Always Right
This is true, no matter how good your idea is. If customers stand in line to buy your product, then you had a good idea. If not, then it still may have been a good ideaâ€”there was just no demand.
Get your idea out in front of people and start getting their feedback. Youâ€™ll hear how useful it will be to them and what changes would make it even better. Whether itâ€™s socks or a new training course, your customers will weigh in with their vote. Pay attention to the poll results so that youâ€™ll be ready to supply their demand. Or move on to your next good idea!
Matthew Toren is an Award Winning Author, Serial Entrepreneur, and Investor. He Co-Founded YoungEntrepreneur.com along with his brother Adam. Matthew is co-author of the newly released book:Â Small Business, Big Vision: â€œLessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Rightâ€ and also co-author ofKidpreneurs.