Starting a Business? How to Research Your Business Idea First

Transcription:
Second Act Success Podcast
Season 1 - Starting a Business? How to Research Your Business Idea First | #247
Episode - #247
Host: Shannon Russell
Transcription (*created by Descript and may not be perfectly accurate)

[00:00:00]
Welcome back today, we are going to continue our journey taking you from employee to entrepreneur.
On this episode, we're going to talk about researching and truly validating your business idea. Because it's easy to get excited about a new idea, but before you invest your time, energy and your money,
you want to make sure it's a viable business? So research and validating your idea is like laying the foundation for your business. And all this work will definitely be worth it down the road. It's what will help you really build a strong and sustainable business that you can move forward confidently and with a lot of enthusiasm. You ready?
Okay first. Why is researching your business really so important. Simply put research helps you avoid any costly mistakes down the road. It's the difference between launching a business that meets a real need in the market and launching a [00:01:00] business that falls flat because there's no demand for it. So when you've researched your business idea, you're actually gathering information about your potential customers, your competitors, and the overall market. This is market research.
The information that you'll get will help you refine your idea, and it will help you. Understand how to make your spin on this business really unique and really you, by doing this market research now. You will be setting yourself up for success because you'll know exactly what your customer wants and how you can deliver it to them.
Let's talk about asking the right questions as you do your research. Number one question is who is your target audience? So who are you serving? Who are the people who will benefit from what you are offering with your business? What are their demographics, their age, gender income level location.
Think about a perfect customer avatar. And who that person is as you build your business, [00:02:00] think about what you are planning on offering and how that will serve this perfect customer. You wanted to think about your perfect customer's pain points understanding this target audience will help you in creating the products and services that you plan on offering.
You want to make sure that what you're offering actually resonates for them. Now think about it. You don't want to create a product that has no use to anyone. And if you're creating a product, you want to make sure you know who you're going to be marketing that product to.
Really niching down and figuring out who your target audience is, you're going to get your answers and be able to build the business that will serve them the best. And ultimately that will serve you as the business owner, the best.
Niching down is extremely important as well.
If you have a business that serves everyone, most likely it will serve no one. In the marketing world. That is what we talk about. As far as niching down, for [00:03:00] me. I serve women in their thirties, forties, fifties, who are looking to change careers. That is who as a coach I work with.
I can say that I work with anyone and everyone. But in trying to market to that audience and trying to create programs and memberships and services to offer, it's going to fall flat because everyone all over the world doesn't need the same care when it comes to changing careers. If you think about that as an example, And just really getting focused on who is your ideal customer avatar and who you are serving as your target audience.
The next question to ask is who are your competitors? And this is a fun one because you can really dig around online and you can learn a lot about similar businesses that are out there offering similar services or products.
How are they doing? What are they offering? What are they offering as far as services or products? What are their price [00:04:00] points for these products or services? What would you, what can you do? That's different. And by analyzing all of this information about your competitors, you can find opportunities to make sure you differentiate yourself. And again, this is creating your own niche in the market.
If someone makes sneakers for senior citizens. And you want to make sneakers for senior citizens. How are your sneakers going to be different? Maybe you're making sneakers that are just for women.
Maybe you're creating sneakers that are just orthopedic. You want to think about what you're creating, what other people already have out there and how your product or services will really be unique to you.
Now in thinking about your target audience and your competitors, you're going to see what the market demand is. So that is the next question. What is the market demand for your business? Is there a growing demand for your products [00:05:00] or your services?, is the market already saturated with many different businesses doing the same thing? You are planning. Or can you look at some trends in the industry and maybe consider a business idea that would be fits a bigger picture or niches down even further?
What does this market demand actually look like? And how can you gear your business for potential growth in the areas that the market needs?

Speaker 3: If this episode has you thinking about starting a business or growing the one that you already have, I offer free second ACT strategy calls. This is where we map out what makes sense for your business and your life. You can book yours now at second act success.co/strategy, or grab the link in the show notes below.
Now let's get back to the show.

Okay, so now you've answered these questions. You've done the research. Now, how can you use that research to really validate your business idea? Here we go. So [00:06:00] validating your idea means you're testing these ideas out in the real world. You are asking potential customers. You're asking friends and family, you were putting questions out into the real world. Via polls online or asking questions in groups on Facebook or LinkedIn. You Were getting this feedback from potential customers.
So you can see if they're willing to purchase these products or services from you. And if they are willing, how much are they willing to pay? And is there anything else that they might want? Is there something that you're offering that there is no need for, by bringing your ideas and all of the research you've taken into validating the business idea
with actual potential consumers, you're going to learn so, so much. Here are a couple of strategies you can try to validate your business idea successfully. First is conduct surveys or interviews. Reach out to your target audience directly, you can create online [00:07:00] surveys using tools that are very simple and free.
Like Google forms. Or you can use survey monkey or you can conduct one-on-one interviews with people to. Just look at your inner circle and then go online for a broader reach. Ask questions that will help you understand their needs and preferences and their willingness to pay.
That is important because you don't want to put a product out there, have the price point be too high and not make your sales. So gather the feedback via surveys or interviews.
You can also create a M V P a minimum viable product. This is basically a simplified version of your product or your services. That you can offer to your audience to test the waters. So, if you are creating a course, you can create a beta course and offer it for free or for very low. To a select group of people to get their feedback.
Before you open it up to the general population. Remember this MVP does not have to be perfect. It [00:08:00] just needs to be functional enough to solve a problem for your customers so that you can get that feedback back that you need.
Another idea is to test with presales or even crowdfunding. basically you can validate this idea by offering pre-sale specials you can market advertise and see if people are willing to pay at a lower price to get in as an early access. An early bird special, if you will.
by launching a crowdfunding campaign, you will also be able to see if people are willing to pay for your product or service. Before it's fully developed and you'll get to build it as you go. Plus you'll get a headstart on funding and building your customer base while you do that.
I know this step can seem like a lot of work doing the research, reaching out to people, getting their feedback. But if you think about it, By taking your time in this step of the process. You'll be able to prove that your idea is [00:09:00] valid.
That it's good. The customers want it. And you can also uncover any potential issues before you launch it. And at the same time, you're getting feedback. You're also letting people know about your product or service. So you're instantly getting people into your world already. You're getting potential customers on your email list.
And you might be able to just tweak or pivot these ideas. In a simple way. It doesn't mean it's an entire overhaul of your business plan. It's making adjustments early rather than waiting till your product or service is already out to market. And then realizing that no one is purchasing.
And then you've got to go back to the drawing board.
All right before we wrap up this episode, I want to do a quick recap because I know it's a lot. When you think about. All of this work that goes into researching and validating your idea. So let's make it nice and quick and simple for you. Number one, you're going to research your business idea and make sure that you understand your market, your competitors, [00:10:00] and your target audience. Number two. Validate your idea through surveys, minimum viable products or presales this way you can ensure that there's a demand and that people are willing to pay for your product or service.
Number three, be open to feedback. As you gather this information, you want to be open and willing to make these changes now, rather than later.
This is such a valuable tool to have this information. So once you have it, make sure you implement what's needed so that you can increase your level of success as you move forward.
All right. I hope this information has been helpful and I hope it gives you a clear understanding of why research and validation are critical steps in launching a business. By taking time to do this. Now you will save yourself a lot of headaches later. And money and time. My friend, if you have found this episode helpful, share it with another woman, you know, who might be considering launching her own business. we [00:11:00] have many more episodes with more actionable advice and insights that are coming your way so that you can get started quitting your job and building your dream business. I am Shannon Russell, reminding you to keep researching, validating and keep moving forward on your entrepreneurial journey. I'll talk to you soon.
My friend.
Speaker 4: Thank you for joining me for another episode of the second Act Success podcast. If this episode has you thinking about starting a business or growing the one that you already have, I offer free second ACT strategy calls. This is where we map out what makes sense for your business and your life. You can book yours now at second act success.co/strategy, or grab the link in the show notes below.
As always, thank you for being here. Until next time, I'm your host Shannon Russell wishing you the best day ahead as you plan your second act. I'll see you on the next episode.