PART 3 – SOLID AS A ROCK?
So you have your one or two page business plan drafted and you are sure that you are ready to hit the market place with your revolutionary product or service? Well, perhaps there are a few more steps to follow before you make that move. One of those things is a feasibility study. You can look at this stage as testing the waters before you dive in full throttle.
This stage of planning a business has been reported to be the most challenging stage, as a result a lot of entrepreneurs hang their dreams to dry and forget just how revolutionizing this was going to be to the world. It is challenging because it requires a listening ear and a patient attitude. It takes guts to hand over your dream to family members, close friends and strangers for scrutiny, but cheer up and look on the bright side; once this stage is done, you will probably take a near perfect if not perfect product or service to the world.
Go through these steps before you write the final draft of your business plan and submit it for funding or start your operation;
ARE YOU SOLVING A PROBLEM?
The question is simple enough for you to answer otherwise you would not have considered your concept to be one worth pursuing for profit. Profitable companies, however, look to develop products and services that others are interested in enough to make a purchase. It is therefore advisable that you ask others what they think of your idea or concept. Starting with your friends, family and network is the most cost effective way to collate enough data to form and informed option on how feasible your idea is. if your product or service solves a problem they have. If the answer is yes, find out how much they will be willing to pay for the solution and what additions or subtractions they would make to your idea.
Try collecting data by sending out short surveys and questionnaires to people outside your network that you think are most likely to have eager interest in your offering. This can be costly but there are ways to reduce the cost by asking close friends, family and people in your network to send out the survey to people in their networks. If ten people you know send it to ten people in their network, you will have collected the opinion of one hundred people.
The point of this exercise is to determine if your idea has potential to generate a profit and but it can also assist you in determining if you need to tweak it before you release it on the market. Even if you find out that you are not the first one to solve the particular problem, you may find that you can solve the problem better than your soon to be competitors. Instead of looking at the negative feedback as a sign to close shop and work on the next idea, use it to refine the idea you are currently working on.
As an illustration, allow me to ask you which company invented the MP3 Player (Portable Media Player)? If you guessed Apple , I am afraid you are incorrect. The first company to successfully develop the MP3 Player was SaeHan Information Systems in 1997. Apple simply improved the invention when they produced the iPod. A majority of the time when consumers want to purchase a Portable Media Player, they often look to purchase an iPod, not a SeHan MP3 Player. You can also revolutionize an existing product or service should you find that your idea is already being implemented by another company.
EVALUATE THE DEMAND
There are numerous resources you can use when evaluating demand for your product or service. I believe that using a mixture of traditional and modern methods of research pays off far better than utilizing one or the other in isolation.
Start small by letting people in your network sample your product or service for a fee. Make sure that you charge for the trials because this is the best way to truly understand the value of your offering. If people said they were interested in your product during completion of the first step, take them to task by asking them to pay for the product. If they are unwilling to pay for it, they probably do not value your solution. This will make it a high-risk investment, which you may not be able to support or secure funding for.
If indeed people are willing to pay for your product or service, start gathering feedback and make haste to release the improved versions for further evaluation and feedback.
Use Google Ad Words. Test how many people are searching for the product. Google Ad Words is a great tool for this type of evaluation. You can see which words have been searched with high, medium and low hits on google. The monthly average searches and the level of competition for your Ad Words is also listed. This tool is free and can be used by anyone who has a google account. Go for terms, words and phrases that have high average monthly searches and low or medium competition and you will find your market with better ease than if you go for ad words that have high competition. This exercise will also prove to be beneficial when you develop your website content.
A simple google search will also give you a good indication of whether people are searching for your service or product or not. Just go to google search and type in your offering. Google has an autofill feature which will instantly give you an indication of what people are searching for pertaining to the key words you type in. Use this simple tool to find our who your competitors are. Once you have a list of competitors, search for reviews on their offering . This is a great way to check what strategies and improvements you can apply to your idea. You can also develop Unique Selling Points based on this method of competitor investigation.
MEET YOUR FUTURE CUSTOMERS
Now this may come as a surprise but meeting the people you want to sell your product without selling them anything can save you multiple resources in the long run. Go to places, seminars, expo’s and other events that will give you an opportunity to meet, greet and question your target audience.
Get first hand opinions, views and feedback from the people you think will have the most interest in purchasing your product or service. Pay attention to how they behave, what their state of mind is pertaining to your concept or idea, who else they may know that has a similar interest in your offering and most of all, what value they are willing to place on your offering.
If you made it past the criticism and the negative reviews without losing heart or dropping you grand idea, read up on how to build a full on business plan for funding purposes in part 4 of the Start Up Series.