I noticed a trend when profiling business owners for Entrepreneur Mom Now Edmonton. When asked the question, ‘What piece of advice would you give other moms wishing to start their own business?’ – most of the answers have been to ‘do your research’. So let’s talk about that. What kind of research are they referring to?
According to the definition of market research, it is an organized method of gathering information about our market or customers. I like the Entrepreneur.com definition of this process:
Accurate and thorough information is the foundation of all successful business ventures because it provides a wealth of information about prospective and existing customers, the competition, and the industry in general. It allows business owners to determine the feasibility of a business before committing substantial resources to the venture.
Let’s talk about five steps you need to take to determine the feasibility of your business idea before you jump in …
Use the Industry Canada website to start your general number crunching. Not only does this site provide industry revenues but also demographic information so that you can guage your potential market. According to Entrepreneur.com, you should use multiple sources of data to ensure your financial modelling is concrete. I would suggest City of Edmonton or Provincial data as a source of information in addition to Industry Canada.
Friends & Family
Ask around. Talk to your network of friends and family to see if they believe in your idea, if they understand your product or service, and if they believe the market would support your idea.
Connect with a lawyer in your chosen industry, a business coach and a similar-business owner to ask questions, lots of questions. Years ago I thought I wanted to open a children’s book store. I called up a book store owner in another Canadian city and asked if the owner would openly share some of her experiences with me, and she did. Most of the time other entrepreneurs are more than happy to share their experiences and expertise if asked.
Google is your best friend
Check out your local similar offerings, read magazines (online and off) in your chosen industry to get a feel for your potential competition, industry leaders, and local hot spots that might become your suppliers, vendors and alliances.
Attend a Networking Event
Don’t be shy. Attend a networking event to meet some local moms in business face-to-face and pick their brains. We have a lot of great local networks right here in Edmonton to utilize and meet other great entrepreneurs – new and veteran!
There a are a few red flags to watch out for during your research:
- market saturation (too many players out there already)
- difficulty distributing your product or service (too expensive, no local suppliers, vendors etc)
- low profitibility
You want to be able to answer a few questions when you’ve done some preliminary feasibility research (this is even before your business plan completion, by the way):
- Is there a need for my product/service?
- Will people pay for my product/service?