Six steps to in starting a business
1.Market Research
Market Research is key to a
new business becoming a
profitable entity. It anticipates
and minimises risk, identifies
potential customers and helps
ensure success. Only about
half of new small businesses
will survive 5 years. To ensure yours is a survivor, learn
how to research your market, identify potential clients
and have a strategy for attracting them.
Market Research, or Business Intelligence as it is
sometimes called, is a vital weapon in ensuring your
new business survives to become a strong profitable
entity.
It is about anticipating and minimising risk,
understanding your potential customers and so helping
to ensure success for your new venture. Don’t skip this
important step in the rush to get your product to
market.
Finding customers is the most difficult part of running
a business. So it is vital to research your market,
identify potential clients and have a strategy for
attracting them before you invest your time and money
in a new venture.
Only about half of new small businesses will survive 5
years. Here are some of the factors that often
contribute to a new business’s failure;-
Lack of capital, often due to poor planning or
unexpected costs
Poor cash flow management
Unexpected market factors-growth or reduction in
market size
Underestimating the competition
New entrants to the market
Technological problems
Not having a strong business plan in place
Lack of understanding of the market
Poor advertising or marketing
Weak product
lack of selling and marketing expertise
over trading or over expansion
According to First Research, a Dun & Bradstreet firm,
the global market research industry produces about $50
billion in annual revenue.
Quality, professional market research helps you to ask
the right questions for your business. Good market
research reports will use a mixture of primary and
secondary research to provide accurate information and
conclusions.
Primary research is information gathered through
surveys, interviews and other direct contact with
industry experts and participants. For example by
contacting industry leaders and canvasing their
opinions.
Secondary research is information gathered from
company reports, trade association documents and
industry journals, and published market research
reports.
It is a good plan to carry out both Primary and
Secondary research. Then you should check out
competition and assess your potential consumer base.
This should give you a fair idea of the viability of your
business.
If you commission professional advice, you can expect
a report that will cover the following points;-
Context/Background: This is a review of the recent
history of the market; how it has developed into its
current size and shape. It will also consider the
market in the context of factors such as the
economy, social and cultural changes, globalization,
and technology, and consider how these factors are
affecting the market.
Detailed Market Data: While context and analysis
are critical, this section will look at hard numbers.
It will use whatever data is available.
Competitor Information: Players, products, profiles,
competitive analysis and other information on the
market.
Trend Analysis: This will look at what the data
indicates about the health of the market and
opportunities for future growth. It should cover
emerging markets, and new forms of competition.
An understanding of the market potential should be
gained from the information above. The size of the
market and its possible growth will determine the
viability of opening up a business in the sector.
So from this report, or from your own research, you
should be able to consider the following types of
questions.
Assume your intended business is selling potted
plants:-
How many people buy potted plants?
What is the market value?
What is your cost price?
What is the likely gross profit you could make
selling a potted plants?
How many potted plants must you sell to run a
successful business
Is this a realistic number for your business model?
Is the market already saturated or near saturation?
Can you enhance your business model-for example can
you offer other products, services, sell online, open
other outlets?
Market research should answer key questions, expose
risks, and will probably throw up other questions.
Professional analysts who study markets, products,
industries, sectors, and consumer demographics are
trained to provide unbiased factual information, clearly
stating the risks associated with a market.
If you plan to conduct your own research rather than
commissioning a professional Market Research project,
be careful that you don’t seize on information and data
to back up what you are hoping to find – that your
business is a great idea!!
But take care to be open to market realities and
factors that may even enhance your business plans.
Keep a look out for niche markets that may present
better opportunities than mainstream, where there is
more competition.
Carefully assess market factors. There are many
factors which can affect the size of a market and its
pace and direction of growth. They include:
Regional economics, politics, culture, geography and
weather
Seasonal and cyclical trends
Fashionability and trends
Customer wants and needs
Competing markets
Technological advances
Educational opportunities
Employment
Regulatory requirements
Financial incentives, grants and programmes
Company schemes and productivity.
Also look carefully at competition:
Is there a lot of competition in your market?
Who are the players?
Is the market dominated by a few large companies
or is it mostly small operators?
What are the strengths and weaknesses of your
competitors?
What is the market scope of your competitors?
How profitable are they?
What types of problems do they face?
What is your Unique Selling Point (USP)? What can
you offer customers that your competitors do not?
Finding customers is the most difficult part of running
a business. But without them you don’t have a
business, so do some demographics research as well,
to establish who your customer is.
Make sure you know as much as possible about who
will be buying from you.
For example, if you’re marketing to consumers:
What is their gender, age, marital status, religion,
ethnicity
Where do they live?
What is their economic status?
Do they already buy the product or service you’ll be
offering?
How are they purchasing these products or services?
What issues do they have with your competition?
What do they like about your competition?
How much are they paying now, and will be willing
to pay for your products or services?
What do they do for a living?
What are their lifestyles like?
What do they think of your product or service?
Why will they buy from you and no one else?
How will you tell them about your business?
Knowing the answers to these questions will help you
promote your business much more effectively.
Then you need
to consider
marketing and
advertising
.How will you
attract
consumer’s
attention, get
them to
purchase your
product, and
come back to
you for repeat
purchases.
What is your USP –how should you transmit that
message?
What can you do to assure customer retention?
How can you exceed customers’ expectations?
Can you offer some type of guarantee?
What are the best advertising routes to reach
customers?
Some of the more common advertising routes include
Websites, Social networking sites (such as Facebook),
Radio, Television, E-mail marketing, E-bay, You Tube,
Internet, magazines, newspapers. Trade magazines,
Forums and Billboards.
Social media advertising, blogging, and use of other
online social forums, has rapidly become one of the
biggest platforms on which to advertise your business.
What type of advertising will work best for your
business depends on who you are trying to reach, your
budget, and your product. You need to find the most
cost effective method for you.
All of this information will be valuable in formulating
your business plan, which we will discuss in another
lesson. Having all this information at your fingertips
will give you an edge over your competitors, an
understanding of your client base and will improve your
businesses chances of survival.
1.Market Research
Market Research is key to a
new business becoming a
profitable entity. It anticipates
and minimises risk, identifies
potential customers and helps
ensure success. Only about
half of new small businesses
will survive 5 years. To ensure yours is a survivor, learn
how to research your market, identify potential clients
and have a strategy for attracting them.
Market Research, or Business Intelligence as it is
sometimes called, is a vital weapon in ensuring your
new business survives to become a strong profitable
entity.
It is about anticipating and minimising risk,
understanding your potential customers and so helping
to ensure success for your new venture. Don’t skip this
important step in the rush to get your product to
market.
Finding customers is the most difficult part of running
a business. So it is vital to research your market,
identify potential clients and have a strategy for
attracting them before you invest your time and money
in a new venture.
Only about half of new small businesses will survive 5
years. Here are some of the factors that often
contribute to a new business’s failure;-
Lack of capital, often due to poor planning or
unexpected costs
Poor cash flow management
Unexpected market factors-growth or reduction in
market size
Underestimating the competition
New entrants to the market
Technological problems
Not having a strong business plan in place
Lack of understanding of the market
Poor advertising or marketing
Weak product
lack of selling and marketing expertise
over trading or over expansion
According to First Research, a Dun & Bradstreet firm,
the global market research industry produces about $50
billion in annual revenue.
Quality, professional market research helps you to ask
the right questions for your business. Good market
research reports will use a mixture of primary and
secondary research to provide accurate information and
conclusions.
Primary research is information gathered through
surveys, interviews and other direct contact with
industry experts and participants. For example by
contacting industry leaders and canvasing their
opinions.
Secondary research is information gathered from
company reports, trade association documents and
industry journals, and published market research
reports.
It is a good plan to carry out both Primary and
Secondary research. Then you should check out
competition and assess your potential consumer base.
This should give you a fair idea of the viability of your
business.
If you commission professional advice, you can expect
a report that will cover the following points;-
Context/Background: This is a review of the recent
history of the market; how it has developed into its
current size and shape. It will also consider the
market in the context of factors such as the
economy, social and cultural changes, globalization,
and technology, and consider how these factors are
affecting the market.
Detailed Market Data: While context and analysis
are critical, this section will look at hard numbers.
It will use whatever data is available.
Competitor Information: Players, products, profiles,
competitive analysis and other information on the
market.
Trend Analysis: This will look at what the data
indicates about the health of the market and
opportunities for future growth. It should cover
emerging markets, and new forms of competition.
An understanding of the market potential should be
gained from the information above. The size of the
market and its possible growth will determine the
viability of opening up a business in the sector.
So from this report, or from your own research, you
should be able to consider the following types of
questions.
Assume your intended business is selling potted
plants:-
How many people buy potted plants?
What is the market value?
What is your cost price?
What is the likely gross profit you could make
selling a potted plants?
How many potted plants must you sell to run a
successful business
Is this a realistic number for your business model?
Is the market already saturated or near saturation?
Can you enhance your business model-for example can
you offer other products, services, sell online, open
other outlets?
Market research should answer key questions, expose
risks, and will probably throw up other questions.
Professional analysts who study markets, products,
industries, sectors, and consumer demographics are
trained to provide unbiased factual information, clearly
stating the risks associated with a market.
If you plan to conduct your own research rather than
commissioning a professional Market Research project,
be careful that you don’t seize on information and data
to back up what you are hoping to find – that your
business is a great idea!!
But take care to be open to market realities and
factors that may even enhance your business plans.
Keep a look out for niche markets that may present
better opportunities than mainstream, where there is
more competition.
Carefully assess market factors. There are many
factors which can affect the size of a market and its
pace and direction of growth. They include:
Regional economics, politics, culture, geography and
weather
Seasonal and cyclical trends
Fashionability and trends
Customer wants and needs
Competing markets
Technological advances
Educational opportunities
Employment
Regulatory requirements
Financial incentives, grants and programmes
Company schemes and productivity.
Also look carefully at competition:
Is there a lot of competition in your market?
Who are the players?
Is the market dominated by a few large companies
or is it mostly small operators?
What are the strengths and weaknesses of your
competitors?
What is the market scope of your competitors?
How profitable are they?
What types of problems do they face?
What is your Unique Selling Point (USP)? What can
you offer customers that your competitors do not?
Finding customers is the most difficult part of running
a business. But without them you don’t have a
business, so do some demographics research as well,
to establish who your customer is.
Make sure you know as much as possible about who
will be buying from you.
For example, if you’re marketing to consumers:
What is their gender, age, marital status, religion,
ethnicity
Where do they live?
What is their economic status?
Do they already buy the product or service you’ll be
offering?
How are they purchasing these products or services?
What issues do they have with your competition?
What do they like about your competition?
How much are they paying now, and will be willing
to pay for your products or services?
What do they do for a living?
What are their lifestyles like?
What do they think of your product or service?
Why will they buy from you and no one else?
How will you tell them about your business?
Knowing the answers to these questions will help you
promote your business much more effectively.
Then you need
to consider
marketing and
advertising
.How will you
attract
consumer’s
attention, get
them to
purchase your
product, and
come back to
you for repeat
purchases.
What is your USP –how should you transmit that
message?
What can you do to assure customer retention?
How can you exceed customers’ expectations?
Can you offer some type of guarantee?
What are the best advertising routes to reach
customers?
Some of the more common advertising routes include
Websites, Social networking sites (such as Facebook),
Radio, Television, E-mail marketing, E-bay, You Tube,
Internet, magazines, newspapers. Trade magazines,
Forums and Billboards.
Social media advertising, blogging, and use of other
online social forums, has rapidly become one of the
biggest platforms on which to advertise your business.
What type of advertising will work best for your
business depends on who you are trying to reach, your
budget, and your product. You need to find the most
cost effective method for you.
All of this information will be valuable in formulating
your business plan, which we will discuss in another
lesson. Having all this information at your fingertips
will give you an edge over your competitors, an
understanding of your client base and will improve your
businesses chances of survival.
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