I have seen several prospective business start-up clients recently that have arrived at our first meeting together full of energy and enthusiasm for their new business venture. After the initial pleasantries, the conversation proceeds something as follows:
Me: ‘So what is your business idea’?
Client: ‘I’m going to sell…’
Me: ‘Do you have any evidence that there is a demand for this’?
Client: ‘Yes. I have done some research and I think that there is a gap in the market. My friends and family say that it’s a good idea and that they would definitely buy one’!
Me: ‘Good. Aside from friends and family, have you carried out any other research’?
Client: ‘Nothing yet, but I intend to produce a questionnaire and ask lots of people’
This is a typical scenario. After a few more questions on my part, it becomes clear that the client has not done the required homework. I reply ‘You say there is a gap in the market, but how do you know there is a market in the gap’? In other words, just because there appears to be a gap in the market for a particular product or service, does not automatically mean that there is a demand for this. What if someone has beaten you to it, had already investigated the market to discover that there was no business to be had!
There is never any substitute for undertaking some comprehensive and meaningful market research to understand the proposed market place you are intending to enter with your new business product or service.