Small business owners wanting to expand their product or service range may come up with a new business idea, rush into it without much thought because they are swept on a wave of enthusiasm and then discover that there is little or no demand.
I’ve made this mistake and I’ve seen first-hand as others have done the same. It’s almost as if we think that our enthusiasm will make up for everything. Our reasoning and gut feeling are shoved aside in the white-hot act of creation and product development. We may be blinded by the “darn it, just do it” mantras spouted by celebrity entrepreneurs.
What is it then that we need to do? How can we temper our enthusiasm and put our product ideas to some sort of test without killing our initial energy that went into conceptualising our product or service?
At the outset we need to do some homework to find out the potential size of the market for our product or service. We need to find out how many people would be potential buyers. Then we need to estimate how many people could potentially buy from us. Surveys, market studies and Google searches can give you basic, free information on your market.
Next, we need to assess how interested people are in the category of product or service you plan to introduce. Are they passionate fans that will buy up every gadget, magazine, book or DVD associated with the product? Or don’t they really care that much? Car batteries are essential but who even knows the brand name of the battery under the bonnet of their car?
The following information you must know is how much money have people spent before on products in your chosen category. It’s not so easy to find this out but there are ways to obtain a fair indication. If you’re selling specialised crafted garden tools, ask enthusiastic gardeners.
Now for a personal test. What level of interest do you share with your hungry market? If your product is in the health market, do you share the same level of interest in, for instance, foods as do others in the category? Do you consume books, magazines, websites and trot off to health shops all the time to keep your health at peak levels?
It is essential to know these four things well before you invest your heart and soul (and savings) into a new product or service.
You can use more ways to assess new product potential but if you don’t even know these four, you’re just diving into the sea not knowing whether the waters below are shallow or deep.