Developing a business idea is one thing, starting it up might be a little challenging of them all, but the most important one, which determines your business survival and success, is the market.
It is therefore important that you have with you all of the necessary information about your targeted market. This will include what your customers need, instead of what you are planning to sell them.
Here are the factors to consider:
You need to come up with a perfect business idea.
The biggest challenge of starting up a business is coming up with something or an idea that is needed and scalable in society, as it determines your size of the market and if you read my previous post most business ideas are overrated.
To enable you do that here are some of the factors to consider:
i. Understand Your Customers
A business existence is dependent on the customers.
It is therefore important that you do not develop your idea based on what you believe your potential customers need or like but rather what they actually desire.
Pick an idea that you have interest in and enjoy doing.
iii. Understand Your Competition
Your competitors determine your market share.
If they control a large share of the market, it means that you will be fighting for the remaining small share with other upcoming businesses thereby reducing share of the market.
Accept Your Market as Being Harsh But Judge it Fairly
Accept the fact that the market determines your business success; therefore it is important that the largest share of the market is in support of your idea.
It is therefore important that you get all the necessary information of the basics, which include:
i. Revenues for your choice of category in your local, regional and national market.
ii. Know the number of competitors in the market.
iii. Determine whether the market is a new one and growing or stagnant and mature.
Pick Proven Categories of Businesses for Starting up then Identify Your Niche
Categories that are broad and proven offer great opportunities compared to hot new markets.
It is considered very risky going into sizzling new markets compared to those already in existence. This is because people have developed loyalty to a particular product plus they offer enough room for creativity and innovation in that proven market.
On the other hand, sizzling new ideas move quickly. Likewise customer tastes and preferences rapidly change too making the new product life cycle very brief.
It is advisable that you start broad, proven and general then later on go specific.
Go as narrow as possible then exploit the available opportunities from where you can expand. This will give you a great opportunity to see problems that require solutions and the services required by the customers, thus presenting you with an opportunity to grow and be a sole provider.
The result of this is you turning onto a price maker and not a price taker, with good profit margins.
Focus not on Market Share but Wallet Share
Going after buying marketing share or new customers is a very expensive way of starting up and growing your business idea.
On the other hand, going after customer loyalty and repeat business gives you an opportunity to alter your objective from how to acquire new customers to how much you can sell each customer and how long you can maintain them.
Complete focus on a repeat business idea such as an insurance policy is far cheaper to sell to current customers compared to buying a new idea.
Focus on building customer loyalty with these current customers in order to acquire exponential return on your marketing investment or initial advertising.
Put Your Business Ideas to Test
This might range from starting up a simple web page to packing an existing store with your retail products.
The response from this informs you of what potential customers need and desire.
This information will enable you to enhance what you are bringing into the market or discover a more profitable business and market than you had conceived.
Wanted to add something in the story, do in the comments!