September 23, 2014
Entrepreneurs have a lot of small business ideas ranging from personal, retail and environmental services to technology. In different countries the levels of support small businesses receive from their governments vary depending on their industry. Those who efficiently optimize this support and execute their ideas are successful. This makes it very important to evaluate small business ideas before introducing them to the market.
The most common way to validate small business ideas is to share your concepts with other market partners and request their feedback to determine the viability of the business. The feedback you receive from other partners will enable room to improve your product accordingly. As well, conducting market analysis research can assist in identifying the target market in order to efficiently execute a small business idea. If you find through market analysis research that similar products are already in the market then you need to focus on the differentiator. You must be very clear about what makes your product or services unique and different so that the customers choose your product over the competitor.
Competitive analysis is one of the best tools that allow you to research the competition. This analysis determines who the competitors are. Once they are identified, you are able to gather information about them such as what they sell what benefits they offer and their pricing A company’s website for instance allows you to gather a lot of information about them. Talking to vendors and employees can also help to provide some insight about their products and culture.
Financial feasibility analysis is another important step you can use to validate small business ideas. Money plays an essential role when starting a small business and it is definitely the key to executing your ideas. You must plan the source of your capital, ongoing expenses, and a revenue model to assess the feasibility of your business. Once you have done this research and you are convinced that the idea is feasible, you are able to launch your product or services as quickly as you are able. In the state of west Bengal, India handicraft items are made by artisans who reside in remote villages. Introducing these items to domestic and international markets is a small business idea. To validate this idea, a company called Rumani Handicrafts did an extensive market research. They found that there is a huge demand for Clay and Terracotta products in the international market but the specification of the product demanded was different from what the artisans were making. The entrepreneurs were able to request that the artisans adjust their products to fit the market requirements.. The entrepreneurs considered the cheap cost of labour in the country and the conversion of money to confirm that their business was financially feasible. As a result, Rumani handicrafts executed the idea and initiated the business successfully.