Is My Business Idea Good Enough?

They say you never know until you try.

When it comes to starting a business though, that statement could use a bit of qualification. You may never be able to know for certain whether your business will take off, but you can get a pretty good idea of whether or not it’s actually worth trying by doing some market research beforehand.

If the whole idea of doing research sounds expensive, time consuming, or completely out of your wheelhouse, know that it’s far more costly to go all in on a business idea that simply doesn’t work.

It may not even be that your idea is bad, but if it costs more to produce your product than the market is willing to pay for it, you’re never going to be able to make a living selling it. And you probably want all your hard work to pay off, right?

In this post, I’ll walk you through the basic steps you can take to conduct preliminary market research before launching your business.

Step 1: Define Your Target Audience

Research requires going out and asking people questions related to your product. But can you just ask your mom, your best friend or anyone off the street and expect to get valid insight? Probably not…

To get useful results, you need to talk to a relevant audience; the kind of people who you might one day hope to sell to and the kind of people who will give open, honest answers without fear of hurting your feelings.

In the early stages, you’ll have to do some educated guesswork about who your ideal customer might be.

Start by thinking back to why you wanted to start this business in the first place. What problem did you want to solve or what desire did you want to tap into?

Next, start thinking about related situations and try to put yourself in the shoes of your potential customer. What would lead them to go looking for your product? What do they care about and what do they dislike etc.?

Write down everything you know about them. Behold, you have a target audience for your research!

Step 2: Talk to Your Target Audience

The next step is to go out and find your target audience, and ask them exploratory questions about their lifestyle, interests, values and challenges.

Where you find those people depends on the product you’re selling. For example, if you want to sell an organic shampoo and you know your audience should care about buying organic, you might start by interviewing people who shop at organic food stores.

On the other hand if you’re creating software for B2B businesses, you’ll probably want go out and speak to people who work at B2B companies.

Speak to as many people as you can, but aim for a minimum of five really well targeted people. At this stage, you’re not trying to evaluate whether your product is a fit, you’re simply getting to know your audience and what makes them tick.

Step 3: Refine Your Research Questions

Drawing on what you’ve learned about your audience, it’s time to hone in on a set of research questions that will allow you to:

• Validate the target audience for your product
• Validate what you want to do and how you will do it
• Validate the features of your product

These questions can be asked in a simple survey format, but be sure to leave room for some open-ended questions either.

In surveys, every question counts. You don’t want to ask so many questions that people will get bored and give up, but you don’t want to leave out key questions.

Start with some basic demographic information to ensure your audience does in fact fit your target group. Then dive into some scenarios in which a person might find themselves using your product. Where would they go looking for a product like yours? How much would they be willing to pay for it? What would motivate them to buy?

Finally, ask questions to evaluate a range of features for your product and how important they are. Is your audience willing to pay more for a product that’s organic, or are they more concerned with affordability?

Does it need to be instantly available, or are they willing to wait longer for something custom?

Your goal here is to find out whether the things you think you know about your market, and what you think is important about your product are in fact true. Aside from that, it’s a good opportunity to discover things you may never have thought of… hence the importance of those open-ended questions!

Step 4: Conduct Surveys

Armed with a relevant, concise and useful set of research questions, you’re now ready to go out and survey a representative target audience. Aim for at least 20–30 respondents, but possibly more depending on what you’re researching.

There are various tools available to help you with surveying, from SurveyMonkey to Google Forms to service providers that will connect you with your ideal audience for interviews. The key is to ensure that you’re reaching the right audience, not just any random people — and not just your family and friends.

Keep in mind, you may need to offer incentives to research participants in exchange for their time, so plan to budget for that and also think about whether you need budget to promote your survey in a targeted way!

Lastly, it’s a good idea to add a question to your surveys asking respondents if they would be willing to be contacted for further information. You may want to reach out later on to follow up on points that need clarification or expansion.

Step 5: Review Your Research and Analyze Your Insights

Time to get analysing! This is where nuggets of insight that could support your thesis or send your business into a new direction will reveal themselves. If you’ve done a good job of creating your survey, you’ll have a lot of rich data to sift through.

Read through everything, writing down notes, observations and any new ideas. It could be that your results validate your idea, but it’s much more likely that you’ll find a few aspects need to be rejigged.

The results may even be surprising! Perhaps you’ll identify a new segment, a different angle or a way to make your product better. Or perhaps you’ll realize that the problem you’re trying to solve already has a better solution — or is not a problem at all!

If you’re left feeling more uncertain than before you started, don’t be afraid to go back to step two to conduct more interviews or to reach out to your survey participants to better understand the situation.

Next, put your creative thinking hat on and explore new avenues for your original idea. Maybe you need to consider a different market, or you need to rethink your supply chain to make it faster and easier for people to buy your product.

On the other hand, if the results aren’t quite what you were hoping for, don’t despair. Be happy about how much time and money you’ve just saved by testing before launching!

Whatever the case may be, keep an open mind — every twist and turn is part of the process of becoming a successful entrepreneur. It’s important to enjoy the journey!