So, you’ve recently had that “eureka” moment of conceiving a new business idea.
I do not need to be a fortune teller to know you feel a million bucks, like Bill Gates with his first Microsoft prototype, like Columbus beholding the shores of America for the first time. You just thought up an idea that could change everything for you, what else could you possibly need to put in place in order to birth your idea?
I’ll tell you. It starts with an “R”.
No… I don’t mean Relax…
A lot of research needs to be done before acting on any business idea, no matter its size or scope. However, the depth of your research is highly dependent on how solid your business idea is. While most people, as a matter of fact, choose to call this particular stage the research stage, I prefer to call it the business modeling stage–but for the sake of this article, let’s stick with the majority. Below are four types of research that you should do before starting that business of yours.
1. Market Research
This might burst your bubble, but there is no idea so unique that it has never crossed the mind of man. Your case might either be that nobody has acted on the idea, or that somewhere, somehow, it already exists. This is why I prioritize market research over other researches that need to be done. Your market research should include a thorough look at your value proposition and existing products/services that might be in close competition with you.
Apart from getting to understand the market, knowing and studying how probable competitors run their businesses will go a long way in helping you tweak your idea in order to come up with a new value proposition. As convenient as it can be to research other companies in your market, it can be just as helpful to learn about them by attending conferences and unique events organized by these companies.
2. Business Positioning
You should know exactly the kind of products and services you want to deliver and how to position yourself in the market before starting your business. Put a tag on the product or services that you intend to offer. Are you bringing a new product that will require the employment of labor? Does your company require raw materials? What is the proximity setting between your value proposition and the resources needed to achieve them? Knowing this will make it easier to determine whether to set the company up as a sole proprietorship, general partnership or a limited liability company, thus making it easier to handle taxes and liability.
3. Know Your Customers
You can't sell a product without knowing your exact customers. As a matter of fact, your business should exist because of the services you are rendering to your customers. While a lot of business startups target as large an audience as possible, streamlining your target audience will go a long way to help you set goals, make targeted adverts and also make financial projections. To find your audience, you can attend events relating to your field to find out what customers enjoy and what they are not enjoying. The internet has also made customer research easier. You can easily create a form to take a poll on social media, and you can utilize social media platforms like Facebook and Instagram.
4. Categorize Your Risk
The amount of money you make in your business is as important as the amount of money you spend, especially when it comes to keeping yourself legally compliant and protecting yourself from basic business risks. Say you were opening a construction company and you plan on constructing suburban houses. Before you even consider staffing for the project, you should be able to consult with someone who is acquainted with the region you are going to be operating in, and the difficulties your employees might face.
Once you begin hiring, you will also want to make sure that you have proactively organized training to show that you have taken all appropriate steps to generate a safe working environment for employees. As a small business owner, a fast, simple and scalable way to do this is to leverage third-party businesses that provide services such as anti-harassment training, and whose sole focus is to remain on top of altering legal demands.
In conclusion, the excitement you felt when that idea hit may begin to wane after going through these suggestions. But then again, that is why starting a business is not meant for everyone. However, have it at the back of your mind that there are professionals that are willing to help you carry out all this research. If you know you don’t have the time or energy, outsource them to these professionals for a token (it might be more). Research is almost as important as your idea, so don’t rest on your oars just yet.
Get to work!