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How to do research for business ideas

How to do business research

Why is research necessary for business ideas?

A lot of people would like to start their own business. Many of them do not have the foggiest idea about what kind of business they would like to conduct. There are so many options available that it is hard to decide which one is probably the best for them.

Research should be done before you proceed with your business ideas because that way, you will be able to find a good idea for yourself and know whether it makes sense or not.

If you do not want to do research, you will end up with not one but several bad business ideas.

And one last thing, research is necessary because if you don’t have any plans or ideas for your business, then how can you expect to generate income? You cannot just wing it and hope that everything will turn out well.

You need to consider so many things before starting a business, even if you have the best business ideas in the world.

What are some of the things that should be included in the research? There are many things to consider before starting anything, and it will take time. Without knowing these things, you cannot even be sure if your plans can be accomplished or not.

Here are some of the things that you should take into consideration:

Research first: Every new business idea needs to be researched. Why must this be done? Because failing to do so will lead to a lot of mistakes and failure. As an entrepreneur, the sooner you start, the better it is for you and your business. So, if you don’t want to waste your time thinking about what kind of business idea you want to conduct, then make sure that you research first.

The market: You also need to research the market you want to conduct your business in. If you are into a niche or industry that has been done before, it will not be that great for you and your business. So, make sure to learn something new by researching the business idea.

Competition: Knowing about the competition is important because if they are already in that industry or niche, it would be tough for you to compete against them even if your business is excellent.

Knowledge: Do you have enough knowledge about the business that you are going to conduct? If you do not have any knowledge, then it is better to start studying first. But if you know enough about it, then it would be better for your business.

Research with experts: You should also research by consulting experts as they know and experience such things. If they have the same business idea or industry you are going to conduct, then it is fine. But still, it is better to ask them if they think that your business idea will work out for sure. If not, then you should look for another idea.

Steps to do business research

Not every business idea is a winner. Indeed, many people with great ideas that research well will still fail in their endeavor due to not following through or getting a poor start. The following list of 11 steps provides one way to tackle the problem and make sure your new venture has the best possible chance for success.

1) Do your research – Undertaking this first step will help you to identify a business idea at a time when you have enough time and energy to carry it out properly.

2) Consider your customer – What products or services will be needed? Why will they purchase them? What do they pay for now? How are prices set in the industry? Ask around if you don’t know.

3) You must have a product or service idea – what will it be, how much will it cost and how many units will be produced (e.g., a computer game) or delivered, and how many hours of service will be provided in a week

4) How much will it cost you to start the business, by which time you will hopefully know what your break-even point (BEP) is. Do you have enough money in savings to cover this? What about all of your assets? When was the last time you had a proper look at them? Can they be sold if needed? Have you done this recently?

5) Your marketing plan – this may not be needed for a one-person enterprise, but for all others, it is essential. This may take the form of a research document with several phases or stages. At the very least, you need to know your target market and who you are trying to sell or provide your goods or services to. You will also have a good idea of what the cost of marketing might be. Your marketing plan may vary over time as you gain experience – see stage 9 below.

6) As you look at moving into your target market, look for the cheapest supply source. This could be your mum or dad or any other family member you may have a good relationship with. It could also be that you know someone in the industry who wants to sell their business and will give you a significant discount on what they are prepared to sell their business for.

7) You will want a range of suppliers but aim to avoid any too demanding suppliers, even if they are cheaper.

8) You may also wish to have a rough idea of how much money you will need from each supplier and what sort of supplier each is (e.g., cash paid on delivery or as a simple yes/no).

9) Now that you know how much your product will cost, you can have a good look at how much money your business will make in the first year and all the ways that this money will be earned. Now you know exactly how many units you need to sell or service etc. You can then determine how much you will have to invest in the business on an ongoing basis – e.g., whether you require capital in the form of money, suppliers, or equipment.

10) Develop your plans You will need a plan for developing your business and ensuring that it succeeds. This may be a detailed plan requiring discussion and approval from your chosen supplier or customers but may also be a simple Yes/No document with columns for firm decision making.

11) Make a few price lists – You will have to do a price list or price schedule for your chosen supplier if you sell to the public. If you are selling through another business, then you will need to know what their prices are and what their mark-up is. This is not the same as “making” money because you still have your overheads to pay for as well. You will also need a profit and loss (P&L) statement as well.

 

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