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Top 10 Ways to Research Your Product, Service or Market Your First Step to Home-Based Business Success
By Marcia Jedd, President, MJ &Associates
The notion of starting a business in today’s economy is both challenging and alluring. If your new business concept can make it in today’s rocky economy, chances are you’ll make it when the economy is humming along. Does your idea for a new business have the right stuff? The only way to find out is to do your homework. Assess your markets. Research the competition. Forecast demand.
Figures from the Encyclopedia of Small Businesses (Gale Group, 2002) reveal that home-based businesses actually have a better success rate (20% to 25%) than other small businesses (50%) within the first five years. Estimates from the Bureau of Labor Statistics suggest there are some six million self-employed individuals working out of their home. Other estimates put the number at closer to nine million (U.S. Census Bureau). Perhaps these home-based entrepreneurs did their homework and good business planning before making the deliberate move to launch their business. Some have not.
No matter the numbers, it’s critical in today’s environment of also-rans and late-to-market copycats to do the appropriate business planning. Consider these research strategies for a successful launch of your business:
1. Your mission = passion.
Whether for a product or service, in order for your business concept to fly, it must be a good fit with you. It’s no secret that aspiring entrepreneurs need to go deep within themselves to assess their personal skills, interests and abilities. “Entrepreneurs must choose a business concept in true alignment with their passion and determine whether or not they possess the skills and abilities to advance that concept over time,” says Steven Haas, principal of Enterprise Development (www.enterprise-development.info), a Minneapolis-based consultancy that assists emerging businesses. Haas cautions new entrepreneurs to assess if they realistically have the physical, emotional, and financial resources to weather the inevitable entrepreneurial storms along the way.
2. Why others haven’t succeeded.
We can all learn from our own failures and those of others. Consider these leading reasons why businesses fail:
Poor research
Poor planning
Poor connectivity (such as to the Web, customer service etc.)
Undercapitalization or lack of funding
Emotional decision making
Failure to seek and involve professionals, including mentors
Inability to effectively market the business
Now identify areas where you may be weakest and strive to turn these into strengths over time.
3. Write it down.
There’s great power in the written business plan. Just ask Jay Lipe, author of The Marketing Toolkit for Growing Businesses, and CEO of Emerge Marketing (www.emergemarketing.com), a Minneapolis-based consultancy that helps companies grow their businesses. “One of the most dedicated acts of marketing is to commit an idea to paper. Every new business owner should write down their idea in three sentences: the first describing what their idea is, the second identifying who would be interested in it, and the third detailing how the customer will be made better by the product or service,” Lipe says. “The act of capturing an idea on paper commits a business owner to focus: a key marketing tool.”
4. Define it.
Once you know what your proposed business concept is, go deeper to define it. There are a myriad of questions to answer in your business planning. What’s the size of the market you plan to compete in? What’s your unique selling point? How will you price your product or service? Finding salient answers to these questions will go a long way toward shaping your business plan and clarifying the next steps you need to make. Success and elevator pitches depend on it. For a checklist for researching and developing your business plan, visit:
http://www.marciajedd.com/research.htm.
5. Library trips.
Secondary research, that is, printed or online sources such as articles, reports and reference material, will help you define your market. Use the many free business references databases available at most public libraries to search for information. Scour these databases for market size, trend, and competitor information. Do additional keyword searches based on the findings of your initial searches. Evaluate the integrity of the source and age of the information. And don’t forget, the business reference librarian is there to help.
6. Talk to experts.
After you have uncovered more about your markets through secondary research and back grounding, seek out experts. Remember: research doesn’t have to be difficult but it isn’t for the timid. Get to the heart of what you need to know by interviewing industry experts. Call these experts directly, and ask your questions. For example, trade associations, manufacturer’s reps, marketing professionals in your chosen industry, and a host of other unlikely authorities can provide an accurate impression of a market. Find the trade publications that serve your industry. Call the publication’s advertising rep, and ask for any available studies or data on the market. Request a media kit from the publication.
7. Free resources.
Reliable free sources are all over the library, the Web, and within your community. These sources will expand as you continue to grow your network via research activities. Some of the search engines of many online publication portals allow you to retrieve articles at no cost. Once you pay to get in the door of a trade show, you’ll find a goldmine of free information, competitor brochures, and willing experts who want to talk with you.
You don’t need to conduct a formal focus group to gather five potential customers in a room. Ask these interested individuals questions on how to improve your business idea. Query them for what would cause them to buy your product or service. You can also conduct brief informal polls via e-mail to ask a sampling of your targeted customers, friends, and colleagues similar questions.
8. Taking research to the next level: Hiring a professional.
Use research firms, independent business researchers, and the research departments of your local library. These valuable resources can help you retrieve articles, identify trends, talk to the competition, summarize information, and otherwise find answers to help you gain clarity about your business. Use the answers you receive for your business planning and your marketing.
If you do some of the upfront planning yourself, formal research can be an affordable option, even on a tight budget. Check with research firms in your area for their fees for surveys, focus groups, or other kinds of research. Some research firms will even combine survey questions with other clients to help cost-conscious clients. Phone surveys and other polls can take a lot of cold calling. Even though today’s pro-privacy environment and do-not-call lists discourage consumers and business people from answering questions over the phone and e-mail, remember that informed questions and engaging someone about their affinities or business profession are often welcomed when people have the time and trust the source.
9. Use your gut.
Keep it simple. If going down one alley isn’t producing answers, quickly shift to other resources. If the information you do find and evaluate isn’t pointing toward market opportunity, it’s time to reassess.
10. Internet marketing.
Once you have a concept that’s viable, go early to the Web. Web sites have made or broke businesses. The presence of a web site and using keywords that customers are looking for can catapult your business into the success realm. This means web site coding and copywriting must include the appropriate keywords. “Especially if you have a niche business, you get results with the power of the keyword search,” says Joanne Pratt, president of Joanne Pratt & Associates (www.joannepratt.com), a Dallas-based business consultancy, and author of a recently released report commissioned by the SBA, “E-Biz: Strategies for Small Business Success.” Pratt points to prosperous businesses on the Web, even as obscure as casket furniture and dog booties. HBM
Marcia Jedd is president of MJ & Associates (www.marciajedd.com), a Minneapolis-based marketing research and communications consultancy founded in 1991. Jedd assists product and service businesses of all sizes in researching their markets and marketing their businesses. Her bylines appear in a wide variety of publications including the Miami Herald, Minnesota Business, Supply Chain Management Review and World Trade magazine. She can be reached at
mj@marciajedd.com.
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