Skipping Ahead Will Set You Back
Now that you’ve completed the Introspection phase of launching your solopreneur career, you should have an appropriate business idea. You may believe that you already know exactly what you want to do. Do not skip ahead to the Planning phase. The Research phase is imperative.
It is not uncommon that with research you may change the focus of your business. If you do make any alterations, go back to your Introspection Survey. Verify that this new business focus still meets the desires and needs of your life plan.
Unique Value Proposition
Before you get started with your research, you need to define a focus. I recommend that you start with a draft of your Unique Value Proposition (UVP) – or in plain terms, why your customers will buy from you. Chances are that you are not creating a business without some form of competition – whether direct or indirect (and if you are, then you should seriously investigate whether there is a viable market for your idea). For you to survive and thrive, you need a reason why you service a particular market niche better than the competition.
A UVP will help define your target market, the products and / or services that you will offer to that focus base along with why your products / services provide a better value for their needs than the current competition.
Key Market Research Questions
Here is a list of key market questions to find answers to before creating your business plan (and definitely before you launch your business):
- What are the demographics (age, gender, affluence, location) of your target audience?
- What is the primary way your target market purchases the products and / or services you plan to offer (i.e. via the Internet, catalog, store)?
- What are your target customers passionate about?
- What problems can you solve for your target customers?
- Who are the competitors in your market? What products and services do they offer? What are their prices? How do you plan on servicing the market different from them?
- What are the Total Available Market (TAM) and the Serviceable Available Market (SAM) of your target market?
- Is your target market shrinking, staying the same size or growing?
- Who are the “experts” in this market?
- Who are potential mentors?
- What joint venture opportunities exist with other businesses that service this market?
- What marketing currently exists that is focused on your target market?
- What organizations, associations, social networks and blogs service this market?
There are several means for gaining answers to these questions.
Experience. This is the most effective means. Having experience in a field that you plan on servicing is invaluable. It will save you a tremendous amount of time and money in answering the questions above. However, if there is a gap in time from when you last worked in your intended market until the time you plan on launching your new business, make sure that you go back and perform your research. The dynamics of a market can change quickly.
The Internet and the Library. This is a low cost, but time consuming option. There is a wealth of information on the Internet and at your local library. You simply need to invest the time.
Marketing Research Firms. Firms customize reports that are in-depth and will save you time, but they can be costly.
Interview Professionals. SCORE and other mentors within your industry are great for real-world information, especially if you have limited experience servicing your target market. This is another low-cost option.
Surveys. Create a series of clear, concise questions that can be easily answered by potential customers. Surveys can be conducted via the Internet, survey companies, mail, email, phone or in person.
The Competition. Visit competitors’ locations, review their web sites, try their products and services, and see what write-ups and customer comments they have received.
Investor Relations. Publicly traded companies post financial and market data on their web sites. The Investor Relations section on their site includes audio files with performance statements and market data made by top executives, SEC filings (10K and 10Q) statements as well as quarterly earning statements. Often times within these documents and audio files, there are statements about the health, size and trends of their market.
If you need help performing market research, contact me. It’s one of my specialties.