The challenges of starting a new business
Every entrepreneur usually believes that his or her concept will be the next
million dollar idea. This enthusiasm and motivation to succeed will definitely
be needed throughout the early stages of a startup, especially when it comes to
the different challenges of
entrepreneurship. Many people are simply not aware of
the difficulties associated with starting a new business, including the personal
and financial sacrifices during a new companyâs initial years. In addition, they
may not be prepared to dedicate their time in working long hours or be successful
in securing the necessary funding
to start and sustain their small businesses.
The importance of objectivity
However, this excitement and enthusiasm can sometimes be so strong it can prevent
objectivity. Instead of planning ahead and conducting the necessary research prior
to the launch of their company, some entrepreneurs may opt to open their businesses
right away and lack the adequate preparation in doing so. An
entrepreneur needs to effectively prepare for this risky venture, view their
new business proposals objectively, and acquire all means to understand the industry,
their competitors, monetary projections, and their potential customer base if they
want their product to be successful.
A great idea vs. what consumers want
Inexperienced entrepreneurs may also assume
that their âgreat ideaâ is what consumers will want or desire. This is often not
the case. Believing they possess the next great idea is quite different from proving
their products and services are something their target audience is willing to pay
for. To prevent possible product failure, every entrepreneur needs to test market
their ideas in order to have a sense of their prospective sales and profits before
mass producing and selling them. Through market testing, small business owners will
be able to determine if in fact they have a competitive advantage over similar products
and services and if their products are what customers are looking for.
The advantages of market testing
During the testing phase of a
new business, the entrepreneur will be able to learn more about their prospective
customers. For example, they will be able to acknowledge their potential buyersâ
demographic distribution, what their customers like and dislike in their products,
and how customers feel about using similar products by their competitors. They will
also be able to find out if consumers are willing to pay for their products and
learn how to improve the products in order to entice new customers to their launched
business. Through market testing, business owners heavily rely on consumer feedback
for a competitive advantage.
Market research
Questionnaires can be prepared for the targeted audience and data can be collected
according to the results. Surveys, intercept studies, telephone and opinion polls
can also be conducted in order to understand the general requirements of the target
population. Once the initial results prove to be positive, entrepreneurs should
use focus groups and personal interviews to develop a better understanding of the
preferences of their potential customers. The results of these tests will offer
insight in helping entrepreneurs greatly improve their
new business ideas.
Conclusion
Prior to starting a business,
entrepreneurs should test market their ideas before formally introducing them to
the public. Through vigorous market testing, business owners will be able to determine
who their customers are, any direct and indirect competitors, which promotional
strategies are the most effective, and if there will be a demand for their products
on the market. Product and market testing are effective investments which will save
entrepreneurs future losses should their products and services fail to meet a need
in the market.