So you’ve got a great business idea – and your close friends and family think you’re on to a winner. Now what?
Developing your business idea into a viable product or service is a critical part of building a business.
By assessing and researching your market at an early stage you’ll be able to establish whether there is a market for your product or service. This step can be time consuming and seem like an unnecessary (and boring step) when you have an idea and want to start running with it. But if you miss this step out, you could face disappointment when our products don’t sell, or people don’t buy your products…and even after you spend money on advertising and promotion.
So, how can you assess whether your idea can form the foundation for a successful business? And just how do you monitor and measure its progress.
Finding and developing your idea
A new idea is often the basis for starting up a business. Many mumpreneurs spot a gap in the market and start businesses that provide a product or service that fills it. Others come up with ways to improve an existing product.
Coming up with a new idea
If you want to start a business but don’t yet have an idea to work with, there are many ways to go about identifying one. The following questions may help:
- Do you have any particular skills that could form the basis of a new business?
- Do you have a hobby that could be turned into a business?
- Has there ever been a time when you needed a particular service or product that nobody else provides? If you needed it, there is a good chance that other people will too.
Developing your idea
Once you’ve got a business idea, take time to refine it. This will help you to decide whether it could be the foundation of a successful business. There are various established methods of developing a business idea. You can:
- conduct market research to discover whether your idea fills a gap in the market
- think about whether your idea can take advantage of an opportunity created by new technologies, e.g. by trading online
consider whether social trends will affect demand for your product, eg the increasing demand for organic food .
Is there a market for my idea?
There are certain criteria you can use to establish this:
- Does it satisfy or create a market need?
- Can you identify potential customers?
- Will it outlive passing trends or capitalise on the trend before it dies away?
- Is it unique, distinct or superior to those offered by competitors?
- What competition will it face – locally, nationally and globally?
- Is the product safe for public use and does it comply with relevant regulations and legislation? Seek legal advice before proceeding.
Market research can play an important role in answering many of these questions and increasing your chances of success.
Market research techniques can be basic or sophisticated. You could:
- canvass the opinion of friends and colleagues
- survey the public about whether they would use a product
- ask customers of competing products what improvements they would like to see
- use focus groups to test your product or service
- monitor your competitors’ activities
- look at what has and hasn’t worked in your industry or market niche
- hire a market research agency
It is very important that you are as thorough in your market research as possible, as mistakes made at this stage of development could prove costly later on. Remember, the more information you have, the better you will be able to understand your potential customers, the marketplace and how your product fits in.? For more information, see our guide on common mistakes people make when starting up a business?- and how to avoid them.
Plan the development of your idea
Try to identify the key stages or checkpoints in your product’s development. Each checkpoint gives you a chance to evaluate the progress of your product or service and decide whether you need to make any changes.
Your checkpoints may include:
- designing – turning your idea into a product or service that can actually be sold
- prototyping – creating a useable example of your product or service, which can then be tested
- financing – raising the money you will need to get your business started
- operations – setting up the structure of your business, eg finding a suitable location, hiring staff, etc
- marketing – working out how you will sell your product or service
Judge your progress
If the goals of any of your checkpoints are not met, you need to analyse why this is the case. Ask yourself whether your objectives were unreasonable. If so, you may need to revise your objectives.
There are circumstances when you should reconsider your original idea.
- developing a product or service that isn’t commercially successful
- developing a product that is not technically viable, eg it cannot be manufactured or it doesn’t meet performance requirements
- someone else releasing a product or service which is very similar or identical to yours