Is it a business opportunity or just a good idea? Here’s how you can tell
Market research is key
So, you have a good idea for a product or service, something that’s certain to attract the minds and money of consumers everywhere. But wait!
Before you jump on the business opportunity bandwagon, experts say you should check out whether there is an opportunity in the marketplace for your idea:
- Does it solve a problem?
- Is there a gap in the marketplace for your idea?
- Is there a demand for your service or product?
- Are there competitors with the same product on the market?
- Will people pay for your idea?
A good idea is just that — an idea. But if it’s a great idea, it will make money, solve problems, have viable markets and offer goods at prices consumers are willing to pay. So, if your new service or product fulfills a need or fills a void, check out how willing people will be to pay for your idea.
Start by conducting market research. “You need to talk to lots of potential customers and understand from them if the problem you are solving is real and how they are currently solving it,” said David Zellen, assistant director of startups, UC Venture Lab. “This understanding will help you identify whether your solution is meaningful and has potential.”
Why it matters
Market research looks closely at industry trends — what areas are expanding, declining, what tech developments are affecting the industry and how you can use technology to your advantage.
Is your business idea viable, or is it time to go back to the drawing board? Five points to consider:
- Research your market. Make a reasonable sales forecast for your new business opportunity by looking at physical market limits and spending characteristics of the population in your location.
- Calculate your initial investment. Think through all the required resources by filtering the ideas and finding the opportunities. Lay out your basic expenses such as starting costs and costs of sales against any realistic income.
- Look for sustainable customer need. Search for what the real needs and wants are, and whether or not people — enough people — will spend money on it. An idea becomes a business opportunity when you can act on it.
- Research your competitors. Your target audience should find your proposal to be more beneficial than what is already available. Make sure you have the confidence to present your market innovation as a valuable and needed commodity, or an enhancement of an existing product.
- Test your business idea. You won't know if it’s viable until you test your idea on strangers who match the profile of your target customer. If your target sample feedback is positive and they begin asking where they can get it, you’re on to a possible success. If the feedback is less than enthusiastic, it may not be as good an idea as you thought.
Featured image at top: Photo by Kracken Images/Unsplash
Help for entrepreneurs
Through the 1819 Innovation Hub — UC’s front door to business — the University of Cincinnati connects corporations, small businesses and startup companies to a variety of business development services. Learn how to start, run and grow your business; build prototypes; test new business ideas and more.
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