Did you know that a lack of proper research is one of the common reasons for business failure?
Often what seems like a great idea or a profitable market turns out to be a dry land with no potential revenue to make. Or even worse, with revenue that costs so much to earn that it simply doesn’t make any sense to pursue it.
It’s not a problem if you realize it early or even before you launch. However finding out that you set your business for a potential failure after investing all your time and resources into it is never a great feeling.
If you follow this blog or read through its archives you probably know by now that my first company failed for exactly that reason. I had a great idea, picked what I thought to be a good and wealthy market but I was so naive that I didn’t do any research. I already mentioned few times how it ended and what state it left my life in but if you haven’t heard the story yet, check my about page.
I learnt a lesson, survived and now I share my experiences and try to help you guys do not make my mistakes. In this post I want to tell you about the 5 things you absolutely MUST research if you’re thinking about setting up a business:
1. Your Idea
Not every idea can make money. Not even if it’s the best idea in the world. Therefore you should always research it before investing in your new plan. Try to find out if you can make money from it but also whether you will. Is there enough revenue to earn in your marketplace, what is the competition and what are the opportunities that you could avail of?
2. Marketplace
Is there a marketplace for your product or service? You should research how strong is the market you’re planning to set your business in. Find out how big it is, how many buyers there are, how much money you could make in it and also how difficult it will be to dominate it.
3. Prospects
Research how many potential buyers are in your marketplace and how many of them would be willing to buy from you. Try to discover if they have enough money to spend and what would be their ideal price level.
4. Competition
Never underestimate your competition. Remember that they have been present in your niche longer than you. Research them thoroughly. Who they are, what exactly they specialize in. Find out what their strengths and weaknesses are. Learn what makes them unique on the market and why client would go to them instead of you.
5. Funding
Even if you know that you have the greatest idea in the world, and have researched it as well as your market and competition. Even if you know that your potential buyers need your service and are willing to pay for it you still probably won’t make a killing straight away. Be cautious when you make your funding estimates and always assume that you will have to keep going without any income for at least few months.
A good and thorough research not only can help you set your business on a right track, tell you whether to actually pursue with it or allow you to make necessary changes to make it successful. It also lays a solid foundation for most of your business activities, from marketing to financing the company to planning for your expansion.
And once you know what, where, with and against whom your doing business, you can easily make all necessary moves for your business to grow and thrive.
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