So, you’ve had a business idea. It might be something you’ve been brewing for a number of years and not got around to developing yet. Or perhaps it came to you in a flash while you were in the shower. Either way, this is a super exciting time for any entrepreneur, fledgling or seasoned.
Before you do anything else to pin your idea down into a more solid plan of action, the first thing you need to do is research it thoroughly. Don’t just hit the ground running without doing any homework because there’s a good chance you’ll end up sprinting straight into problems. The best way to start building a good foundation for your business is with both primary and secondary market research:
- Primary encompasses anything that comes directly from your potential customers
- Secondary comprises any other external information or resources.
Not only will you learn a lot about your audience and your competitors in the process, but you’ll also learn a lot about your offering and yourself, as a business owner. So, let’s get stuck in!
What are your customers searching for?
When your customers ask for word-of-mouth recommendations, what are they asking for? Who do they ask, and how or where? For instance, are they posting a comment in the local Facebook group asking for recommendations for a painter?
Another dimension to this is what your target customers type in when they search online. Tools like AnswerThePublic are a good source of information in this respect, so you can see what kinds of search terms your potential customers are using when browsing the internet.
Not only will this help you build a better picture of what your customers are looking for, it will also give you a rough guideline on how much you might expect to spend on paid ads if this is something you decide to explore.
Research your potential competitors
Don’t just delve into who your customers are and what they’re doing in your intended market space – devote time to stalking possible competitors too. Even if your idea is completely unique, have a good look at who might be near you in the market.
- Go through their websites with a fine-tooth comb
- Sign up to their email marketing
- Follow them on social media
- Order their products and try them out
- Read their brand guidelines
- Compare their prices
- Read customer reviews
- Check them out on Companies House
Try to establish what is working well for them so you can adapt this for yourself. Identify where they could be doing better and make these improvements in your own plans. Assess what makes you unique or different, and emphasise this. It might also help you make the decision as to whether or not you need to protect your business idea before someone else stumbles across it!
This part of the process is often referred to as ‘competitor analysis’ and is absolutely critical to your success.
Run a SWOT-style analysis project
If you’ve ever studied marketing or business, then you might already be familiar with the SWOT analysis process. It stands for:
It might be a bit of a cliché acronym but there’s still a great deal of value in the theory behind it. Running this type of analysis to identify the potential opportunities and threats ahead is incredibly useful. It will allow you to see where you can excel, versus the areas you’re lacking in and the gaps you may need to plug.
A SWOT project will also enable you to start planning ahead for the opportunities you want to pursue, as well as any hurdles you might come up against. This will help you understand how much risk is involved in turning your idea into a functioning business, versus the ammunition you’ve got in your arsenal to take on the challenge.
Test your service or product
This won’t always be a viable option, depending on the nature (and cost) of your product or service. However, if are you able to test your offering out before taking it to market, this exercise can provide you with some seriously invaluable insights around things like:
- What level of appetite and demand there is for what you have to offer
- Improvements that would need to be made before launch (for instance, further product development)
- If you’ve got your demographic nailed or if you need to rethink your target audience
- What people are realistically willing to pay for your product or service
This part of the process could manifest as a focus group, or even a soft launch if you’re feeling more confident or further along with your research and development.
Ask an accountant for their advice
You might think you know your budget best, but we’d always recommend seeking the advice of a qualified accountant. They will be able to use their experience to offer guidance on what you can realistically afford based on your current financial situation and forecasts.
Talking to an accountant is also good practice for explaining your business to someone independent who also happens to have a lot of other business experience.
If you select an accountant with specific experience in your industry or niche, they’ll also be able to give you a more educated idea of what you can realistically expect to spend on starting up.
The list doesn’t end there either!
A good accountant will also be on hand to help you put a solid business plan together, as well as steer you in the right direction when it comes to accessing funding and pitching for investment.
Gathering expert advice like this and researching your business idea before officially taking it to market is pivotal to your success. It means you can head off potential problems and ensure your foundations are rock-solid and ready to launch.
Once you’re ready to give your business idea the green light, start as you mean to go on with good bookkeeping and accounting habits—before you’ve even made your first sale or launched your first marketing piece. A qualified accountant can take on that responsibility for you, allowing you to swap added pressure for peace of mind.
Looking for a new accountant? Compare accountancy packages to get started.