Although this might seem obvious, it is fairly common in the industry that entrepreneurs fail to answer investors’ questions about their market. How well do you know your market? In order to make an effective business plan, it’s essential to know everything you can about your customers, competitors and stakeholders.
Poor research can not only harm your business idea, but also put the entire business on disarray. This is perhaps one of the most common reason to why so many startups fail. So be sure to take the time to do your research – to understand your target audience, their motivations and their fears. Take a good look at your competitors, their performances and their strategies.[button open_new_tab=”true” color=”see-through” hover_text_color_override=”#fff” size=”medium” url=”http://inspirationfeed.com/articles/entrepreneurship-articles/5-common-business-planning-mistakes-that-startups-make/” text=”Learn More” color_override=””]
“It’s easy to confuse a good idea for a good business. Ideas are a dime a dozen. What turns a great idea into a great business is execution, and a fundamental stage of execution is market research. Skipping research, ignoring the results or forecasting off of inaccurate data can quickly lead to failure. There’s wide scope for mistakes. You may have a great idea but the market may not be quite ready. Or maybe your idea isn’t as original as you thought. The courage to pivot and evolve your idea as market conditions evolve is endemic of execution. Don’t think an idea is all you need to build a viable business. And if you do, at least test that assertion with robust and independent research.”
~Jay Patel, Founder & CEO, HighQ
Research is Key
Market research is the first thing you must do before starting up. You research might lead you to believe your product can be tweaked to match the market requirements, or be presented in a different way, or even marketed in a specific manner. Market research prior to launch, or even launch planning, is a crucial step that can help you avoid many mistakes.
Take your time with research, look at different competing products, and analyze market growth. How much would the average customer be willing to pay? Can you build a sales funnel by offering free features up-front, and providing an option to upgrade their account later?
This is also the only way you can avoid entering a marketing which has no, or little, potential for growth. For founders who come across this problem in their market research, the best thing to do is re-assess the product, and re-vamp is for a different market.[button open_new_tab=”true” color=”see-through” hover_text_color_override=”#fff” size=”medium” url=”http://www.entrepreneurial-insights.com/why-do-startups-fail/” text=”Learn More” color_override=””]