Look before you leap. Any diving instructor would say that to his protege on the plank. And yet, those words carry wisdom that best fits when starting a business. From where we’re standing, the COVID-19 pandemic has displayed an appetite for destruction that has systematically obliterated small businesses like no other. And the records are jaw-dropping. The coronavirus is poised to wipe out about 7.5 million businesses before the year 2020 ends, CNBC reported.
With all the chaos setting in, it would seem that starting a business might not be a good idea these days. But then again, you could be getting things on the cheap in these challenging times. The trick, therefore, is to determine which businesses are worth your precious dollars and which are not. If you have trouble knowing which is which, the guide below should get you going.
1. Who needs the product?
Starting up a business without knowing your customers is like flying blind. Chances are, you’re setting yourself up for heartbreak that way. The same goes true when buying a business. There’s a chasm of difference between knowing how to make a product and knowing how much people will love it.
That is where product research comes in. It would help if you acquainted yourself with the needs of your end-users. While you could be tempted to skip this process altogether, bear in mind that you can’t grow a business if you don’t cater to the needs of your market, no matter how small.
Tesla has put all this to heart. Using focus groups, the electric car company developed its much-anticipated Model X design.First, it looked at techie men with money to burn. In effect, the innovative company was able to come up with Tesla’s Model S, the precursor to the Model X came about
From the onset, Model X is designed to appeal to women, too. To do that, Tesla tweaked its focus group study to cater to women. That way, women’s feedback formed a part of the basis of the final design.
And the rest is history. Today, Elon Musk has skyrocketed his fortunes like never before, becoming the third richest on the planet with a total net worth of over $100 billion. Touche!
Know that getting all the research done can eat a massive chunk of your time. Allowing a survey solutions company to do it for you ensures you get the right methodology, not to mention the credible results you need.
2.What kind of products your market is buying?
Consumer behavior is your magic ball to help you understand your market better. When people buy into products, they go through a decision-making process. Everything is about weighing the pros and cons of the product. Looking into this process and getting a buyer persona gives you a better way to predict the next buy.
Once the item is bought, a sense of wonder ensues. People love to talk about the products that amaze them to friends, endorsing these in the process. Getting to know what kind of products your customers buy are telltale signs to help you package your product line to fit your customer’s preferences.
This allows you to predict market movements with greater clarity. Sadly, it’s a lesson Nokia, the mobile phone-maker giant, learned the hard way. Although it was the undisputed leader for so many years, the Finnish company failed to anticipate smartphone technology. As a result, it became a dinosaur, losing its clout in the mobile phone industry to Apple and Google.
And just like that, unable to predict the needs and wants of its buyers, Nokia fell from its top spot, becoming a has-been where before it enjoyed the limelight as the undisputed leader.
3. Why are they into those products/services?
The same product offering represents different things to different people. Being able to know why people buy into a product gives you a deeper understanding of your market. That way, you are in a better position to market your work for the best results.
It’s true. We can’t read people’s minds. But their buyer behavior will allow us to serve them better. Even data from those that fail to appreciate a product can come in handy. Bill Gates, in one of his books, said, “Your most unhappy customers are your greatest source of learning.”
The pandemic can offer you glorious opportunities. However, if you fail to do a needed study of your market, you could be biting off more than you can chew.
In the end, it’s all about doing your due diligence. If you have the discipline to study your market right, your chances of starting a profitable business increase a hundredfold. Just like a seasoned diver getting a perfect 10 in the Olympics.