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10 Resources to Help you Determine if There is a Market for Your Product or Service
Making Money Online
Many entrepreneurs (and wantrepreneurs) jump into Internet marketing armed with only their unbridled enthusiasm and the desire to succeed. Unfortunately, however, these two characteristics are never enough to achieve success in business. If these were the keys to victory, most of us would be millionaires. My first Internet business venture into the highly competitive field of consumer electronics demonstrates my lack of preparation. I went into this enterprise wide-eyed and bushy tailed and all ready to make a killing. I was instead slaughtered. I spent a fortune trying to go up against the big boys in the consumer electronics space like Best Buy, Wal-Mart, Target, etc. I knew that I wanted to succeed but I did not know enough to first ask myself critical market research questions. These are some of the critical questions I should have asked myself first: Is my particular product in constant demand? How many competitors locally and national are there? Can I effectively compete in price, quality and service? How am I going to identify who my customers are? What are my competitors doing right and how can I imitate them? What are they doing wrong so that I might avoid their mistakes? What is the cost of customer acquisition vs. what I will be charging those customers? I didn't even know where to go in order to find my customers.
Fortunately, there are many free sources you can use to determine if there is a need to go forward with your plans of becoming the next great entrepreneurial success story. So before you start your own business – be it on or offline or both – you should consider all of the preceding questions and others.
- Google Insight for Searches/Trends – This is an excellent – and free – tool for gauging whether or not there is interest in your product or service. It allows you to check the popularity of keywords related to that product or service. It can also be a useful tool in giving you guidance into entering new markets and in creating brand associations.
- Small Business Administration (SBA) –This site provides a wealth of data, loans, tips and resources for anyone wanting to start a small business.
- The U.S. Census Bureau - This site provides you with invaluable demographic data you may need to actually find out where your potential customers are.
- The U.S. Department of Commerce – This resource also has invaluable census and economic data you can use.
- Face-to-face interviewers – Pound the pavement and talk to friends, family and most importantly to strangers about the viability of your business idea. For example, a cousin of mine recently confronted several groundskeepers over several months regarding an attachment to modern lawnmowers that he had thought up. They were all very excited by his idea. (He would kill me if I told you what it was.)
- Would be competitors - This one is kind of sneaky but while you are still a customer, you could talk to those who you will be going up against in order to gather valuable intel. They will know all you need to know in order to run your similar business.
- Standard and Poor’s - With this guide you can investigate industry data in a variety of fields.
- Library listings of trade associations & journals – These resources are also underutilized and usually free. They are very helpful for those wanting to conduct market research but who are on a tight budget. (I am always about pointing people in the direction of resources that are either free or low-cost.)
- FedStats.gov – This useful site collects market data from over 100 agencies.
- U.S. Government publications – Again, these resources are always free and in my opinion are undervalued as market research sources.
A few warnings: Be objective during your research period. Think about your business from the view of your prospective customers. Think of why they would do business with you instead of your with competitors. Ask this question: Does your product or service have an added value that would lure customers away from your competitors? Next, be careful not to reach the wrong conclusions from your pre-business research. A famous example of this is as follows: The late Beatles’ lead guitarist, George Harrison, made a visit to the US prior to the success of his group. As he looked around at the trappings that America had to offer, he concluded - wrongly of course – that since Americas had everything they would certainly not want The Beatles.
Finally, your research may even lead you to the conclusion that your particular venture may not be worth the effort, time and cost of pursuing. I don’t mean to be a downer here but we are often taught to fight and never give up when sometimes a more practical lesson to learn is to be flexible. Sometimes it is better to know when to quit one thing and when to move onto another. After all, isn't it better to learn a lesson like this before pouring time, money and effort into some ill-conceived venture? To avoid such a crushing defeat, it is best to do your homework and be armed with knowledge of your market before you dive into any new enterprise. It could be the difference between success and failure.