Entrepreneurs must be cautious before diving into their next venture. Starting a new business or rolling out a new project can be exciting, but it is important to tread carefully and ensure you have used essential tools to test your business concept. Even if you feel certain of your idea becoming a prosperous one, every effort should be made to know in advance if enough people will be interested in your product or service. Data gathering and validation with your target audience is key to collecting market insights that will support the planning process before you spend time or money on building something new.
At Web Foundry, we advocate building a Minimum Viable Product (MVP) with a pre-agreed set of assumptions that we will test, evaluate, and iterate on during the course of working together. A business concept may already have evolved through many stages of development, but assumptions made along the way, for example concerning your USP or final product solution, are likely to be flawed in some areas. Therefore, it’s essential to put your product in front of the real users and monitor how they feel about it and whether they believe it is a good solution or beneficial to their needs.
Whether you are an existing business owner or individual who wants to start up with a new business plan, analysis of the market is essential for initial decision-making and financial forecasting. Entrepreneurs often use a SWOT analysis for all sorts of decision-making, enabling proactive thinking, rather than relying on habitual or instinctive reactions. Once evidence has been gathered through market research, SMART objectives may also be used to drilldown on what is essential and important for the business to survive and thrive.
Market research should be an important part of a start-up’s business planning, as it helps to influence how and who you plan to target, what would be effective pricing and how to develop your future marketing. Most importantly, results and insights will provide you with an opportunity to alter your business plan if necessary in order to adjust the goals and make profit.
Traditional market research in the field is still highly effective and can be an essential method to analyse your market and build your business plan. This could include stopping people in the street, which is often frowned upon but providing an incentive for participation in a survey can work well. Competition giveaways can be a good way to increase survey responses, perhaps with free samples of your product if possible.
A traditional approach can also be to put together a focus group or to invite a group of people to a one-off event, which they are paid for. In return, you can ask them lots of questions about your product or service to test if they would be interested, but also to discover more about them and what their interests are.
As an entrepreneur, you may be convinced that your business concept is a good one, but it is essential to take a few steps back and test the market. Many start-ups begin by choosing to offer a product or service for free to selected people in order to gain a foothold in the market and open doors for future opportunities.
Digitally, we have a wealth of online tools available to get a business concept off the ground. Firstly, there is a lot of help and advice in the form of tutorial videos, forums, apps and social media channels. Facebook groups are particularly popular for asking others in your location for recommendations and sharing new approach to market ideas with other entrepreneurs.
Observing your target audience in any situation is recommended for contributing to a business plan. We can do this out and about but online we can generate social media discussions, observe the purchase behaviour of customers, and monitor what marketing content they respond best to. This will provide you with knowledge and understanding of what language, messaging, and tone of voice to use in content marketing.
Before embarking a complex website build, it is worth spending time to map out the customer user journey and how this will look on your website platform. Therefore, a prototype may be the way forward in order to reach the final design stages. At this point, you can showcase it to stakeholders, investors, or user testing groups. Final feedback can be used in the iterative process to make final amendments before launching to your target audience.
If you want to start quickly with a simple online presence a landing page, microsite or one-page website can work well to provide a call to action to your targeted audience and encourage them to sign up for more information. This can help test how popular it will be at the early stages and what kind of questions and concerns customers may have.
Your website should demonstrate your value proposition. By sending traffic to it via online adverts or through search engines, you will be able to find out how many people would be interested in the value of your solution and what the return on investment (ROI) is likely to be based on the number of enquiries. Measuring and tweaking your concept along the way can help for your brand to evolve until you reach a good pricing point and most successful sales funnel for generating conversions.
S – Specific
It’s essential to have specific goals in mind and not to go down the route of a generic goal as it will sway you from focused objectives and won’t suit you personally.
M - Measurable
A typical business aim would be sales but what is important is to focus on how many units of sales are required to break even and become a profitable business. A quantifiable objective means it can be measured and eventually contrasted against real figures.
A - Achievable
It is crucial to set yourself a real target that is within reach, reasonable and achievable. It can be motivating to set the bar high, but this can also add to stress levels and hinder efficiency. Likewise, a low target may be too easy to achieve and less effort could be made by your team.
R – Realistic
If your financial forecasting is accurate and calculated then there are real targets to aim for, which should provide an overall picture of where the business is likely to be by the time targets are expected. This gives a realistic overview of planning for the following years of trading.
T – Time-bound
This is important so that you can allocate reasonable time periods to reaching deadlines. If there are no real deadlines, it is a good idea to create some in order to motivate yourself or team to be productive and promote business growth. This could involve breaking down your tasks into time slots and using online productivity tools or apps to help you keep on top of the workload and avoid distraction.
Developing a business concept takes time, money, and resources to implement successful. An essential strategy is to focus on SMART goals that are bespoke to your business and plans. The main focus should be return on investment and long-term growth. Initial plans should involve developing an MVP and testing the market to provide key insights into making your foundation of an idea a solid prepared business plan.