Finding a gap in the market

IMG-20150808-00845A fashion model from Sri Lanka decided to go into business for herself when her father wanted her to do something in business. She decided to give it a try. She started selling haircare products to salons and subsequently also added garments from a factory which she sold to family and friends. Through selling garments she learnt all she could about the fashion business and eventually came up with her own fashion brand. She now owns a publicly listed company.

Her advice to would-be entrepreneurs: it’s important to find a gap in the market even in a sector that is saturated. “An entrepreneur does something which may never have been seen or done before,” she says. “Or do something differently – something that is correct for that time and for the future as well since people are always looking for new ways to shop, be tech savvy, learn etc.”

This entrepreneur got her idea while selling garments from the boot of her station wagon. Entrepreneurial businesses start out as an idea which carries the initial spark of inspiration through to the development of a product or service.

One of the first steps is to research your idea before you jump into business. As one business adviser said, you don’t go into business because your friends and family think it’s a good idea. It doesn’t mean your business idea will fly. You actually need to have identified a need that is not being met by other businesses.

You need to research the size of your market to determine potential demand. You would subsequently learn as much as you can about the gap in the market that you have identified. This means looking at demographics and psychographics as well as estimating average daily, weekly monthly or even annual expenditure on the product or service that you intend to sell.

The next step would be the development of a prototype so you can test it in your marketplace. Your prototype will give you feedback from potential customers so you can modify or revise your initial value proposition in your product or service. Market testing to validate your business idea is essential because it helps to reduce the potential risk. How are you going to know if your prototype is successful or not? People may say they would buy your product but have they really shown commitment such as actually purchasing your product or service? This is why you need to set up your market test in a way that is more than just “I like your product”.

In the second and third phase of idea and product development, you will need to be clear on what your objectives are, understand your competitors, select a pricing strategy to position your business, write a detailed business plan and work out your marketing and distribution.

If you are in the process of trying to absorb everything you can about business, you may want to go to the “Books” section on this website to find out more.

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