If you're preparing to launch a business, it's likely that you anticipate achieving great things. The Small Business Administration, however, reports that only 50 percent of new businesses survive more than five years. Furthermore, 66 percent close their doors within 10 years of beginning operations. To increase the odds that your business will be one of the 33 percent that succeed long term, delay the launch of your new venture until you can answer "yes" to the following questions:
1. Does your product or service fulfill an actual customer need or solve a problem?
A consumer will purchase a product or service if it satisfies a need or solves a problem. Unless your offering meets a specific customer's requirement or provides an effective solution to a customer's issue, invest your time and effort elsewhere.
You can't assume that every person in your target market who becomes aware of your product or service will buy it. For this reason, it's essential that you accurately estimate customer demand. Only then will you know if a customer base is likely to exist that is of sufficient size to make your company's financial success a reality.
2. Is your product or service simple to use?
To ensure the quality of your product or service leaves your customer with a positive impression of your brand, market test your company's offering repeatedly before you launch the business. Only then can you make sure your target customer will use it correctly and do so without issue. For instance, you might ask a focus group, even family members and friends, to use the product or service and provide honest feedback. You can make adjustments if necessary, based on the comments you receive, and be confident that a customer's use of the product will be a positive experience.
3. Are you sufficiently confident in the product to do the work required to sell it?
Once your product or service testing is complete and you're confident there will be a demand for your offering, ask yourself if you're sufficiently passionate about the product to sell it. For your company to be a success, you must be an enthusiastic spokesperson willing to commit a great deal of time and effort to the promotion and development of your business. You, like every 4 out of 5 business owners, will probably need to work between 40 and 60 hours per week to achieve your business goals. Unless you're confident in the probable success of your company, and enthusiastic about contributing to that end, it's likely your passion will wane and your energy will fade long before your company becomes the success it might be.
4. Is your idea supported by market research?
A good way to confirm that a healthy demand will exist for your product or service is to ask consumers to comment on your offering. To do so, you can contract with a company that conducts focus groups or customer surveys. As an alternative, you might crowdsource your idea by requesting feedback from members of a group that's likely to give you truthful and meaningful advice. For a small fee, online tools, such as UserTesting.com and GutCheckit.com, are available to support this effort. Also, you might create and upload a video to YouTube that describes the features and benefits of your product or service, and ask for feedback. Alternatively, you can pitch your idea for a new product to Edison Nation or another product development company that evaluates ideas for a modest fee.
5. Is your business idea linked to a growing trend?
A fad will come then go in a relatively short period, but trends have staying power. Don't waste your resources on fads, but rather consider a product or service that might be in line with a new but long-term trend.
6. Does demand currently exist for your proposed product or service?
You can evaluate the potential market for the product or service your proposed business will offer, and determine whether there is significant competition, by using a search engine, such as Google. Just enter keywords that apply to your business idea; once the search engine presents results, scroll through the listings and click on those that might represent a future competitor in your target market. Pay particular attention to the companies whose advertisements appear in the right column of your search results. Click on each entry and scan each site to review the company's product and service offering. Also, make note of the frequency with which searches are performed for your keywords.
The launch of a business is an exciting time, but the excitement can blind an entrepreneur to the practicalities of a business launch. Before you become overly invested in the process, take the steps necessary to best ensure your startup's launch is the beginning of a successful entrepreneurial career. A "yes" answer to the six questions above will give you confidence in this regard.