Improving a New Business Idea - New Business Idea
Viewed: 14319 Times

The importance of market research and testing
For every successful business idea, there are hundreds that fail. One of the reasons why most business ideas are not successful is because they were introduced to the public without the support of sufficient market research. Therefore, these business ideas did not meet a market demand. Before seeking startup capital for a new business, entrepreneurs should ensure that their business ideas are tested sufficiently before they are formally introduced to the public. Market research and testing during the initial stages of a product’s life will determine if a product or service is viable. It will also aid entrepreneurs in identifying the different ways in which they can refine their current business ideas.

Large corporations vs. small businesses
Unlike giant corporations that invest enormous amounts of money to test potential products, small business owners need to rely on their own knowledge and skills for testing any prospective business ideas. Often times, large corporations are later-stage, high-market capital companies who have already established financial success and can afford to continually test market their products. Small businesses, on the other hand, are an extremely risky venture since most new companies have not established a solid pattern of success. When new business owners introduce a new product into the market without ample preparation (market research and testing), they are risking possible company failure, especially if their product sales remain stagnant. Entrepreneurs are encouraged to be resourceful in market testing, become familiar with the basics of market research and targeted marketing, as well as identify any existing or potential competitors.

Solicit opinions from family, friends, and business partners
Small business owners can enlist the assistance of their family members and friends in evaluating their new business ideas. Families, friends, and business associates can certainly help in detecting any potential problems in the product or service being offered. They can even propose suggestions on improving any current business ideas. In addition, they might be able to convey what they feel will be the most effective marketing strategy for the products.

Ask potential customers
New business owners should also present their current business ideas or prototype to potential buyers and request their opinions. By developing a prototype of their existing concepts, the entrepreneur can easily demonstrate a new product to a prospective buyer. During this prototype phase, potential customers will be able to provide valuable feedback about the new products and can even offer suggestions about how much they would be willing to pay. As with family and friends, these potential buyers can assist entrepreneurs in fine-tuning their business ideas and concepts more effectively. The entrepreneur can also develop financial projections about their products based on the success of this informal market testing.

Feasibility studies
Once the initial results of market testing look positive, entrepreneurs need to employ a feasibility study of their prospective ideas/products. This type of study can help determine how feasible their business ideas are and if there is a need for their products in the marketplace. Most business owners prefer to undertake a feasibility study as part of their own due diligence in researching the industry and determining the capability of their products. It can also serve as a formal document that will help recruit potential partners, investors, or lenders. Feasibility studies essentially address the core of the business idea. It examines the customer's thoughts about the unique features of the new product and how the product should be packaged and delivered. Feasibility studies also examine the potential target for the business ideas, the size of the market, and the costs required to market the products/services.

Assess the competitors
In order to improve a current business idea, entrepreneurs should not only be knowledgeable about the market, industry trends, and potential consumer base, but should also be aware of their competition. This includes being well-informed about the strengths and weaknesses of any major competitors and, if possible, preventing their previous mistakes. A product should then be introduced to the market once it has been modified to meet consumer needs.

Entrepreneurs are always excited about their new business ideas. However, they should conduct thorough market research and testing to initially examine that their products or services are indeed viable. Research can be completed in numerous ways, including the solicitation of opinions from family, friends, business partners, and even potential customers. Feasibility studies can also be conducted to have a stronger sense of the direction of products and to investigate/be aware of any existing competitors. This collective information is vital prior to starting a new business since there is always the risk of a new company failing.

 Digg It    Stumble It

Related Articles