Many businesses fail within five years, and though there are many for reasons for this, often times it is simply because there's no market for the product or service offered.
Business owners who spend too much time focusing on their product, and don't invest enough resources into determining if there's a market for it, can be setting themselves up for failure. As an owner, there are a number of ways that you can gauge interest in the service you intend to provide before launching it. Before you open your business make sure you set aside the time to evaluate a potential market for your product. For advice on how to determine whether or not you have a sellable product, read the tips below:
1. Just search it
This may seem too simple, but one way to gauge the market for your product is to just head over to Google, or another search engine, and look it up, according to Inc. Jesue Walker, an entrepreneur and president of The Ultimate Emergence Company, told the news outlet that using simple keywords is a great idea to determine whether demand exists for your services. When you search buzzwords related to your product, browse the results as well as any column that lists paid advertisements. The advertising section of the results page will represent your potential competition, so pay close attention.
2. What is your target market?
Basically your target market is the kind of people who will be interested in your product, Nolo explained. There are a number of characteristics used to define consumers including age, income level, gender, martial status and geographic location. Use various distinctions such as those in order to put together a sketch of who your average consumer will be. As you do this, try to be as specific as you can. Business owners often cast too wide of a net when trying to define their customer base. However, with a detailed description of your desired customers, you can assemble a more targeted marketing campaign.
3. Collect feedback on your idea
Using surveys or interviews in order to collect feedback on your product is a great way to gauge interest, Inc. noted. There are a number of services that will allow you to tap into the collective mind of the consumer market in order to determine demand for your service. In addition, response to your activities on social media is great way to collect feedback on your business. Don't simply listen to your friends and family when trying to figure out if anyone will actually invest in what you offer, they are inherently biased. Reach out and find out what the world thinks of your idea.
4. Identify a niche in the market
It's time to get specific again and target a market niche for your small business to occupy. For example, Nolo mentioned a law firm that specialized in immigration or a maternity clothing store that focuses on professional wear. Often small businesses find success by identifying a sliver of the market that is underserved, and developing products that target that niche. There are two kinds of niche markets that businesses can focus on. First is the operational niche, in which companies design highly specialized products that will naturally appeal to a very narrow demographic. The other kind is the customer niche. This approach takes a look at a very specialized consumer, and then designs products and marketing campaigns that target the narrowly defined individual.
If you need to invest in research, speak with an expert in order to devise a financial plan that makes room for the investments necessary to define a target market. Use these tips in order to determine whether there is a market for your product.