Test the Product before Bringing it to the Market - Starting A New Business
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The challenges of starting a new business
Every entrepreneur usually believes that his or her concept will be the next million dollar idea. This enthusiasm and motivation to succeed will definitely be needed throughout the early stages of a startup, especially when it comes to the different challenges of entrepreneurship. Many people are simply not aware of the difficulties associated with starting a new business, including the personal and financial sacrifices during a new company’s initial years. In addition, they may not be prepared to dedicate their time in working long hours or be successful in securing the necessary funding to start and sustain their small businesses.

The importance of objectivity
However, this excitement and enthusiasm can sometimes be so strong it can prevent objectivity. Instead of planning ahead and conducting the necessary research prior to the launch of their company, some entrepreneurs may opt to open their businesses right away and lack the adequate preparation in doing so. An entrepreneur needs to effectively prepare for this risky venture, view their new business proposals objectively, and acquire all means to understand the industry, their competitors, monetary projections, and their potential customer base if they want their product to be successful.

A great idea vs. what consumers want
Inexperienced entrepreneurs may also assume that their “great idea” is what consumers will want or desire. This is often not the case. Believing they possess the next great idea is quite different from proving their products and services are something their target audience is willing to pay for. To prevent possible product failure, every entrepreneur needs to test market their ideas in order to have a sense of their prospective sales and profits before mass producing and selling them. Through market testing, small business owners will be able to determine if in fact they have a competitive advantage over similar products and services and if their products are what customers are looking for.

The advantages of market testing
During the testing phase of a new business, the entrepreneur will be able to learn more about their prospective customers. For example, they will be able to acknowledge their potential buyers’ demographic distribution, what their customers like and dislike in their products, and how customers feel about using similar products by their competitors. They will also be able to find out if consumers are willing to pay for their products and learn how to improve the products in order to entice new customers to their launched business. Through market testing, business owners heavily rely on consumer feedback for a competitive advantage.

Market research
Questionnaires can be prepared for the targeted audience and data can be collected according to the results. Surveys, intercept studies, telephone and opinion polls can also be conducted in order to understand the general requirements of the target population. Once the initial results prove to be positive, entrepreneurs should use focus groups and personal interviews to develop a better understanding of the preferences of their potential customers. The results of these tests will offer insight in helping entrepreneurs greatly improve their new business ideas.

Prior to starting a business, entrepreneurs should test market their ideas before formally introducing them to the public. Through vigorous market testing, business owners will be able to determine who their customers are, any direct and indirect competitors, which promotional strategies are the most effective, and if there will be a demand for their products on the market. Product and market testing are effective investments which will save entrepreneurs future losses should their products and services fail to meet a need in the market.

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