Category Archives: Market Research

Business Planning, Entrepreneurship, Market Research

Eight Vital Steps to Proving a Business Case

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After a number of years spent assisting start-ups to write business plans, I believe that the point of all early stage market research is to prove or disprove your business case; that’s what the feasibility does, and it’s best done before you go to the trouble of writing a business plan. In doing a feasibility, you will gather enough information to decide whether to proceed or not, while also collecting most of the data you’ll need to write a business plan.

Here are the main elements of proving your business case:

  1. Validate Customers and Demand. Prove that your anticipated customers truly exist, that they want or need your products and services, and that they will pay for them. This can be done through market surveys, interviews, or focus groups. It can also be determined by studying businesses already in the market.
  2. Confirm The Size Of Your Market. Prove there are enough customers to support a thriving business. For consumer businesses, total market numbers can be found through secondary sources, such as census information, surveys and reports—business-to-business research can be accessed from business databases.
  3. Determine If You Qualify. Prove that you have the skills and knowledge to own and operate the business. This is a matter of matching your skill set to that required by the business or industry. In some cases, you may have to upgrade or get certified before starting the business.
  4. Source Your Suppliers. Identify suppliers and communicate with them to verify availability and costs, including shipping and any duties or tariffs that might apply if you’re moving goods across borders.
  5. Validate Pricing. Prove your pricing will work. This will entail getting clear on the cost of producing and getting your products or services into the hands of paying customers, and researching the competitor’s prices.
  6. Build a Financial Forecast. Prove your financial case—that the business will be profitable—monthly for the first year, less detailed for year two and three. At a minimum, you’ll want to create a sales forecast, a cash flow forecast and a 3-year income and expense projection.
  7. Determine Sustainability. Prove your business will survive and thrive. This includes confirmation of each of the six points above, and taking a close look at your personal situation—ensuring that you can manage the business ongoing in terms of your family, time, money, and energy.
  8. Assess Risks. Prove that you can mitigate risks and meet all of the applicable regulatory requirements. This can be done by talking to those already in business, reading trade or industry publications, and getting involved in relevant associations.

Once you’ve gathered the information above, you will be well on the way to proving or disproving your business case. There may still be other hoops to jump through, such as nailing down financing, building partnerships, clarifying investor strategies, and comparing the investment with other opportunities. As to whether or not to start the business, that is a decision that can only be made by the entrepreneur taking the risk. The eight steps above will prepare you to make the right decision for you.

Business Planning, Entrepreneurship, General, Market Research

eZine Search Reveals Black Hole

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One of the most agravating aspects of the business planning process is the black hole. As I hope we do a lot to eliminate black holes for our customers, I’m always amused when I discover ones I’ve created myself. So here goes…  Last week while coaching a business planning group, Jerry asked the following question “How do I find free ezines to help me self-educate about my business?” I realized then that my simple (I thought) recommendation to “use free ezines to self-educate” was in fact generating one of the dreaded “black holes,” which usually means further explanation needed.

There are millions of ezines available via the Internet today, most of them free. It is easier than most people think to locate ezines. You are just a couple clicks away as you read this blog.

For example, suppose you are starting a dog training business and you wish to become more knowledgeable about the dog training business and the industry.

We suggest beginning your search at http://www.google.ca/ with simple keyword search. For this example, we’ve chosen to use dog training business ezine, but you can apply a similar string of words for your own business or industry category.

For us the top ranking link was to an ezine article at http://ezinearticles.com/?Start-a-Dog-Training-Business&id=2284650 To a probing mind, there’s a great deal to be learned from this page.

• The article itself offers information on starting a dog training business. The article might lead us to a dog training business ezine.

• A glance at the resource box (author’s link at the bottom of the article) tells us the author of the article and links to the authors website. A search of the author’s website might bring other dog training articles or links to ezines. At a minimum, if you happen to be a mom working from home, this link might be useful.

• The article lives at ezinearticles.com which is one of the oldest and most successful ezine websites on the web. Further searches of the EzineArticles website is sure to bring all kinds of dog training articles and links.

• The ads by Google link to several other articles and websites pertaining to the dog training business and industry. These ads are placed by entrepreneurs who are in business and obviously serious about marketing their products and services in the dog training business and industry. Many of them most likely publish ezines for both marketing and customer service purposes. Although the ‘ads’ scenario changes, at this viewing we count 5 ads/links at the top of the page, 8 ads to the right of the article, and another 11 ads in the left side panel.

• Toward the bottom of the page are a number of links to other potential articles – the “Other Related Articles” category appears particularly relevant to the dog training business.

Hitting the back button takes us back to the Google search results, where the first page shows links to Free Dog Training Video Newsletter and Waggin’ Tails Ezine, either one of which might be the publication you need to learn more about your business or industry. At a minimum, they will enable you to peek into your competitor’s world and learn how he or she is doing things.

Another search to try is dog training business newsletter. Search engines have made it easy to find information. You are never more than a few clicks away from whatever information you need to succeed!

Happy learning!