So, you’re thinking about starting a small business but have no idea where to actually start!
The first in this multi-part series, this article focuses on refining your business idea, and market research. In the upcoming weeks, we will look at product sourcing, protecting your business and funding your start-up. At the end of this series, we aim to have provided you with a comprehensive guide on how to start your small business.
The past 18 months have shown business owners the importance of making products and services available online. So this article series will focus on starting a small e-commerce business.
1. Get your head in the game
Starting a business is no easy task and will require much of your time. Besides having enough money to start a business, which we will explore in the upcoming weeks. You’ll need to ensure that you are in the right headspace to start a small business. Knowing why you want to start a business will also help you determine what kind of business you want. Start by asking yourself these questions:
- Why do I want to start a business?
- If you’re currently in a secure job with a well-paying salary, what’s your motivation for leaving your job? Is your small business meant to be a full-time or part-time commitment?
- Achieving huge profits as a new small business owner is highly unlikely in the early days. So, do you have the self-motivation to push yourself through the inevitable troughs of owning your own business, when external factors fail to motivate you?
- Why am I being so hard on myself? You may be battling imposter syndrome when starting a business, and at times feel like you don’t have all the answers. But remember, starting a business is a process and you will learn things along the way.
2. The Idea
So, you have an idea for a business and want to know if it’s a good one. “Every time you talk to someone, you should be asking at least one question which has the potential to destroy your imagined business” – Rob Fitzpatrick, The Mom Test: How to Talk to Customers and learn if Your Business is a Good idea when Everyone is Lying to You.*
Asking your family and friends is a good place to start. But the people that care about you can be biased to protect your feelings. If you want constructive and honest opinions, ask the right questions.
You may have the motivation to start your own business but don’t have an idea or want to refine it. Try asking yourself these questions to get the brainstorming going.
- What problem would my business solve?
- Does my business idea already exist if so, how would my business be better?
- What am I passionate about?
- What don’t I like?
There are also organisations that help start-up founders refine their ideas and establish their businesses. Check out the E4F New Start Incubator from Bruntwood SciTech. E4F is designed to give tailored support to entrepreneurs in the digital or tech industry who are based in the West Midlands area.
If you’re struggling to find a business idea after intense brainstorming, stop. Great ideas can come when you least expect them and once you’ve taken the pressure off yourself. Remember, sometimes you have to consider ideas that seem silly to get to a good one. What if you could wear a blanket with sleeves? This is what Scott Boilen founder of All-Star Products probably thought in 2008, before selling over 30 million Snuggies and generating a profit of over £400 million.
A niche in commerce is defined as an offering of products, services, or serving interests that appeal to a specific or small section of the population. Knowing the niche of your business is a great way of helping you identify who your customers are, what they want, how your business will help them, and how to market to them.
For example, our founder had the idea to make data more accessible to people but asked himself, which people and how? Upon research &facts found that 70% of small e-commerce businesses had the highest failure rate. Although this is disappointing for this sector of business owners, it allowed &facts to evaluate where our resources would be best placed and how small businesses can overcome this failure rate using the &facts market insights platform.
- What will be my businesses niche?
- Who is my target audience?
- Where can I find them online?
- Why do I want my business to target this group of people?
4. Market Research
Market research is one of the most important and expensive aspects of starting a business. Lack of market knowledge and understanding can leave a new small business venerable to failure. A good place to start when doing market research is by validating assumptions you may already have about your target market and customers.
For example, you are going to start a business delivering fresh local produce. You have an assumption that your customers will only want organic produce, spend on average 4 hours a week trying to find this in their local supermarket and at a very high price. Your market research would validate these assumptions, then allow you to make informed decisions.
Try using these methods to conduct inexpensive and affordable market research.
- Identify if there are any gaps in the market and how your business would meet them. Who are these customers? Where does the target audience gather? Once you know this, find out what they need and want.
- Who are your competitors in the market? What is the pricing of their products? How do your businesses compare or differ? What are their strengths and weaknesses? Answering these questions will help you get an understanding of the market
- By using the &facts platform you’ll be able to see market trend insights over a 5 years period, up to the present day and, a month-by-month rolling view. The platform also shows you when there have been significant changes in the market and allows you to consider what influenced them.
- The Ubersuggest.com platfrom analyses the popularity of top search queries on Google and shows you the average age of people making these queries.
If you’ve taken on the challenge of starting a small business there is definitely a lot of planning and research that you will need to undergo but, if you’ve started, you’re already halfway there. Keep going and good luck!