For every good business idea, there are scores of businesses ideas that fizzle in the market. The reason for it is that the business ideas were not backed by sufficient market research.
Before enlisting startup capital for the new business ideas, entrepreneurs should ensure that the idea is tested sufficiently. Market research early on in the life of the product will help entrepreneurs fine tune the business ideas.
Unlike giant corporations that invest huge sums of money to test potential products, small business entrepreneurs need to rely on their own skills for testing the new business ideas. Of course for this they need to know the basics of market research and targeted marketing.
Small business owners should enlist the help of their families and friends in evaluating the concepts for the new business ideas. Families and friends can point entrepreneurs to any potential problems in the product or its marketing. They are the first step in marketing.
New business owners also need to go out and test their product and business ideas in the open market. They need to ask potential customers about what they feel about the product and how much they would be willing to pay for the product. Potential customer's answers will help entrepreneurs focus their business ideas and concepts more sharply. The answers will also provide a baseline that will help entrepreneur's estimate a prospective firm's potential revenues.
Once the initial results look positive, business entrepreneurs need to begin work on a feasibility study. The study will determine how feasible the business ideas are. Most business owners prefer to undertake the feasibility study as a formal document that will help recruit potential partners, investors or lenders.
Feasibility studies should address the core of the business idea. It should also examine what customer's think are the unique features of the product and how the product should be packaged and delivered. The study should also examine the potential target for the business ideas, the size of the market and the costs required to reach the market.
Business owners need to be excited about their new business ideas. This is essential because they will be spending the first few years trying to get the business off the ground.
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