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copyright © 2005, by Karyn Greenstreet. All
rights reserved.
I know. I
know you’re excited about your new business. I know you
have a great idea and when you tell others about it, they
think you have a great idea, too. A great idea is the birth
of a new small business.
But as a
self-employed small business owner, you can’t afford to take
chances on ideas without getting more information about what
your entire market audience wants and what they’re willing
to pay for it. Talking to 10 or 20 other people isn’t
enough. You’ve got to talk to thousands.
In the military and in
NASA, they use a term called “ground truth.” While they can observe
things via satellite and other distant monitoring devices, nothing
beats getting down on the ground and seeing what’s really happening
in real life. Here’s NASA’s explanation of how they use Ground
Truth:
http://asd-www.larc.nasa.gov/SCOOL/groundtruth.html
So, how can you get
ground truth about the viability of your business idea? The answer
is market research. Market research is a study of your consumer’s
preferences and your competition. Sometimes you’ll hear it called a
“feasibility study.”
Through surveys,
literature research, internet research, and other information
gathering techniques, you can learn the trends in your industry, as
well as individual preferences of your potential customers. If
you’re in a well-defined industry, like toy manufacturing, you might
find that your national professional organization has already
conducted research studies on behalf of the members of the
organization.
Why is market research
necessary? Because we all have different tastes, different ideas
about what’s important in our lives, and different ability (or
willingness) to pay a particular price for what we want. Often the
small business owner thinks they have a great idea for a new product
or service, only to discover that people either don’t want that
service or product, or they’re not willing to pay the price that the
small business needs to set in order to be profitable.
Sometimes they discover,
joyfully, that not only do people want this new product or
service, but that these same people can suggest other new
products and services that would work well with the new idea,
allowing the small business owner to see future growth into new
areas. Or maybe they discover through their market research that if
they made a small change in their product or service, for instance,
making a product with a red cover instead of a blue one, that people
would buy it more often.
Another purpose of market
research is to discover what your competition is doing. Say that you
want to create a new type of office product and you think your idea
is unique. Take a look at what’s on offer at the Staples, OfficeMax
and Office Depot websites, and you might discover that your
competitors have already created a product to solve the same problem
as your product solves. Does that mean you should then give up the
idea entirely? No, not necessarily. What it means is that you now
have some ground truth about what you’re up against if you want to
go head-to-head with these competitors.
You need to know the
ground truth about your ideas before you spend countless hours and
money taking a new product or service to market. I know that it
feels like it’s putting a damper on new business idea creation, but
in fact, it’s just the opposite: I’m encouraging you to find out
what your customers want, and what they will pay for it, so that you
can ensure future success.
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Karyn Greenstreet is a Self Employment expert and small business coach. She
shares tips, techniques and strategies with self-employed people to boost
clarity and focus, create sustainable motivation, and increase sales and
profits.
Visit her website at
www.PassionForBusiness.com
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