Business Plan Mistake – #5 Limited Market Research
Business Plan Mistake #5 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.
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