3. Research your market
Test your business idea with potential customers to check if there’s real demand for what you’re planning to sell. This lets you find out about any problems and fix them before you’ve wasted too much time, effort and money.
Watch a video on researching your market to understand your customers’ needs.
- Identify potential customers. Talk to them and find out about their needs.
- If you can, make a basic version of your product or service (a ‘prototype’). Work out the cheapest and quickest way of making something that lets you find out if you’re meeting a real customer need.
- Test it with them and get feedback. Find out what they’d be willing to pay for it. Try out different prices with different customers in a consistent, realistic way to see what people will really pay. Can you make enough money for a return on your investment?
- If there are other businesses competing for your market, think about what will make you different. Can you provide something better than what’s already available?
If you’re in retail you could try different opening hours or home delivery. You could aim for a specific group of customers who aren’t being targeted by other businesses (a ‘market niche’), make something that’s easier to use than competitors’ products, or meet a customer need by solving a problem that nobody’s ever solved before.
If you’re starting a retail business, think about testing your idea by taking a short-term lease on premises for a few weeks or months.