How to Research Your Business Idea
Your research plan should spell out the objectives of the research and give you the information you need to either go ahead with your idea, fine-tune it or take it back to the drawing board. Create a list of questions you need to answer in your research, and create a plan for answering them. Utilize experts in planning and conducting research sessions. They can recommend what type of research is most appropriate, help you develop statistically valid samples and write questionnaires, and provide you with an objective and neutral source of information.
The type of information you'll be gathering depends on the type of product or service you want to sell as well as your overall research goals. You can use your research to determine a potential market, to size up the competition, or to test the usefulness and positioning of your product or service. If, for example, the product is a tangible item, letting the target audience see and touch a prototype could be extremely valuable. For intangible products, exposing prospective customers to descriptive copy or a draft Web site could aid in developing clear communications.
When working with firms on brand development, first look at a business idea from four perspectives: company, customer, competitor and collaborator. This approach allows you to scrutinize a business idea before even approaching the topic of brand development. Here's what to look for in each of the four perspectives:
Think of your idea in terms of its product/service features, the benefits to customers, the personality of your company, what key messages you'll be relaying and the core promises you'll be making to customers.
There are three different customers you'll need to think about in relation to your idea: purchasers (those who make the decision or write the check), influencers (the individual, organization or group of people who influence the purchasing decision), and the end users (the person or group of people who will directly interact with your product or service).
Again, there are three different groups you'll need to keep in mind: primary, secondary and tertiary. Their placement within each level is based on how often your business would compete with them and how you would tailor your messages when competing with each of these groups.
Think of organizations and people who may have an interest in your success but aren't directly paid or rewarded for any success your business might realize, such as associations, the media and other organizations that sell to your customers.
Another approach to research is SWOT (Strengths, Weaknesses Opportunities, Threats) analysis, meaning analysis of the strengths of your industry, your product or service; the weaknesses of your product (such as design flaws) or service (such as high prices); and potential threats (such as the economy). SWOT enables you to understand the strengths and flaws, everything from internal information such as bureaucracy, product development and cost to external factors such as foreign exchange rates, politics, culture, etc. SWOT enables an entrepreneur to quickly understand whether their product or service will make it in the current environment.
Whatever your approach to evaluating your idea, just be sure you're meeting the research objectives you've outlined for your product or service. With those goals always top-of-mind, your analysis will help you discover whether your idea has any holes that need patching.
Checking Out the Competition
Assuming your research process has helped you uncover your competition, you now need to find out what they're up to. Become a customer of the competition, whether by shopping there yourself or by enlisting the help of a friend. Visit their Web site and put yourself on their list. Talk to your competitor's customers, ask them what they like or don't like about your competitor's product or service. If you conduct formal research, include a question like 'Where do you currently go for that product or service? Why?'
Your aim is to understand what your competition is doing so you can do it better. Maybe their service is poor. Maybe their product has some flaws-something you'll only know if you try it out yourself. Or maybe you've figured out a way to do things better, smarter, more cost-effectively. Find your selling point. It's going to be the core of your marketing program, if and when you're ready for that step. It's also going to be what sets you apart and lures customers your way.