How To Start Business in 2022 | Market Research and Competitive Analysis

Common mistake most people do in business is that they create products or services first and then look for customer to buy them.

This always lead to frustrations and in most cases cause the business failure. Instead, when you conceive a business idea (see my previous post on how to Conceive ideas here https://steemit.com/hive-120861/@itymartin/how-to-conceive-business-idea-in-2022 ), look for the customers first, understand what they WANT and how much they are willing to pay, then create products or services for their desires.

One of my students conceive an idea of making Chin Chin using honey instead of sugar. He decided to sell it at N200 ($0.5) for small container.

He brought sample for me and I bought it just to encourage him. The chin chin tasted good but he was struggling to sell it. He later shutdown the business.

My discussion with him revealed that he didn't find customers before he created the chin chin.

That's what Market Research and Competitive Analysis will help you solve.
Market research helps you find customers for your business. While Competitive analysis helps you make your business unique. Combine them to find a competitive advantage for your small business.

Market research blends consumer behavior and economic trends to confirm and improve your business idea.

From the results of your research, you will know if your idea can translate into profitable business or not.

It’s crucial to understand your consumer base from the outset. Market research lets you reduce risks even while your business is still just a gleam in your eye.

This is a great topic on its own but let me keep it simple. Whenever you have a clear business idea, before you launch it, sit back and answer the following questions to get a good sense of your market:

1. Demand:

Is there a desire for your product or service?

I didn't say "is there a need? But I mentioned desire. Desire is a more stronger emotion than need. Don't always feel or conclude that people need something, ask them first ...do Market Research

2. Market size:

How many people would be interested in your offering?

Just because few people desire or demand for products doesn't mean that their patronage alone can sustain your business, helping you make profits. You need more customers to make profits and scale your business.

Calculate how many sales you should make perhaps yearly to earn profits. Then see if your Market size can handle that.

Define your Target Customers

Define who exactly demand for your products or services (target customers). Are they males, females or both genders. Older people, average age, youths, adults, children, workers, students, etc. Define how many of your target customers you reach and sell to.

3. Economic indicators:

What is the income range and employment rate of your target customers?

Are they more of civil servants, workers, self-employed, business owners? How much are they earning daily, weekly, monthly and yearly?

Are they unemployed? How are they earning their money? What's their purchasing power? How often do they buy or go for service?

4. Location:

Where do your customers live and where can you site your business?

Site your business where your target customers live or spend most of their time and will desire your products or services

5. Market saturation:

How many similar options are already available to consumers?

Do your products or services have substitutes? How many are they? What are unique about other products or services? How much do they cost?

6. Pricing:

What do potential customers pay for these alternatives?

How much are they willing to pay for your products (especially if it's a new product or services), and you are still making profits?

Thank you so much @booming04 for always patronizing and supporting my post.

By Itoro Udoinyang