Big businesses launching new products or services dedicate resources and finance to undertake extensive research. They do this for one very good reason. They want to avoid spending time, effort and money launching a product or service that’s unprofitable and could cause reputational damage. If you’re thinking of setting up a new business, you should do the same.

Your priority should be to ascertain whether there’s a market for your proposition. What do customers actually want? What do you know of the existing competition? What are the key market trends and issues? Starting to trade in ignorance of these factors is fraught with danger.

Here are some questions to consider:

Customers

  • What do they want now?
  • What will they need in the future?
  • When do they want it?
  • How do they want to go about buying it?
  • Who do they use at present? What do they like and dislike about their current suppliers?
  • How do they go about finding suppliers?
  • What budget do they have?
  • Why would customers leave other suppliers for you?

Competition

  • Who are they?
  • What do they provide?
  • What do they charge and what are their payment terms?
  • How do they market themselves?
  • What online presence do they have?
  • How do they react to new competition?
  • Who are their customers and suppliers?

Market trends

  • Is the market growing, stagnant or shrinking?
  • What licences or accreditation must you have to be able to operate in the market?
  • How impactful is digital media and e-commerce in the market?

If a business owner approached you without being able to answer a good proportion of the questions above, would you be inclined to invest in that business? Apply the same standards you expect from other businesses to your own.

Undertaking this type of research is essential to understanding what differentiates you from the competition and defining your value proposition. Here are a few ideas to get you started:

  • Talking directly to customers, competition and suppliers
  • Market research reports
  • Media coverage
  • Industry databases
  • Business Libraries

This article was written by the career coaching experts at Chiumento.

Define your business’ value proposition with the support of an experienced business coach. Contact us today.

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