Are you planning to start a small online business from home? If this is your first time, it’s certain that you feel such excitement that the last thing you’d want to do is relax. You want that amazing business idea to launch as if there’s not enough time. But you’ve heard it time and again: If you want your business to succeed, you need to do market research.
What is the importance of conducting market research? Market research benefits your business in such a way that helps you identify growth opportunities. You get to collect valuable data about the audience you serve so that you can provide products and execute marketing strategies that benefit them.
In the process of researching your business idea, there are certain questions you should ask. These questions help you decipher whether your idea is worth a shot and has the potential for profitable returns.
Who are my target customers?
A business cannot be everything to everyone. Just think about it: There’s not a business that serves the entire world. The most sensible reason is that it’s impossible to please everyone. Narrowing your focus to a specific market is the way to run a business that stands out. While taking a stand can make you alienate some people, authenticity gives you a competitive advantage.
If you’re thinking of running an online clothes shop, your potential audience may be women who are into fashion. Create a market persona where you list down details about your audience. Think about their gender, age range, likes, hobbies, and favorite fashion brands.
Can it make you money?
Let’s not kid ourselves here. People who aspire to become entrepreneurs dream of attaining financial freedom. So, if your business idea isn’t what people are looking for, you’d better focus your energies on something else. While doing your research, consider niches or areas of interest that have been gaining popularity.
There are plenty of business ideas that will make you money. You only have to pay attention to growing trends. One way to check trends is by using Google Trends. Enter your desired keyword and look at the level of interest for a topic over a period of time. You can also conduct surveys, listen to online conversations, or simply ask around.
What problem/s will you solve?
Do you know one characteristic that all successful business owners share? The ability to solve problems. Businesses exist to remedy a pressing need in a market. When you provide solutions that people can use immediately, people look at you as an industry leader. Remember that as long as there’s a problem to solve, your business will continue to exist.
How do you know which problems in your market to solve? Try to study your competition. Identify what they did to address your target audience’s needs and the areas they failed to address. Are their products too expensive? Do they sell an item that lacks an important function? Take the time to define the problem and consider multiple solutions.
Where do your prospects usually hang out online?
Now that you already realize the importance of targeting a specific demographic rather than being too diverse, the next thing you should find out is where they spend most of their free time. Knowing where these casual customer conversations take place allows you to connect with them. You’ll also be able to elicit new ideas and valuable feedback which you can use to your business’ advantage.
Try to put yourself in your audience’s shoes. You can also go ahead and visit relevant groups on Facebook and online discussion or forum websites like Quora and Reddit. When you enter these sites, type in a keyword or phrase related to your niche. Niche-focused blogs are also great places to seek knowledge. Head over to their comments section and discover people’s common pain points.
Who are your potential competitors?
A common problem among new business owners is that they have a hard time differentiating themselves. An all-too-common reason is this: They don’t know who their competitors are. Having competitors in business is not bad news. In fact, figuring out which companies you’re up against prevents you from becoming just like everybody else.
The first thing you should understand is that there are two types of competitors. Direct competitors offer the same products you do. Indirect competitors have a different product or service but address the same need. Make sure to pay attention to aspects such as your competitors’ strengths, weaknesses, and pricing.
These are just some of the most important questions you should ask. However, answering these questions will put you in an advantageous spot – especially if you’re just starting out.