Business Plan Mistake Limited Market Research
Too often, innovative entrepreneurs become enamored with their technology, product, or idea and fail to look at the larger community. How many individuals or businesses have a need for your product or service? And, more important, how many are likely to buy?
If potential customers are not uncomfortable with their current situation or method of solving a particular problem, they may be unwilling to spend money on your product. Even if your product provides a better solution, customers may choose not to change. History is full of well-designed, extremely innovative products that were commercially unsuccessful because consumers did not believe they needed them.
Research will help you determine a preliminary level of interest in your product and your customers’ willingness to change. A good starting point for your research is data from the U.S. Census Bureau and information from your local chamber of commerce or commerce department. These broad studies can give you a feel for the overall size of a community.
Surveys, focus groups, and informal conversations with potential customers, even on a limited scope, will help you evaluate the market acceptance of your product. Remember, just because they “should” like it, doesn’t mean they will. Consumers are not always rational.