Finally, I asked the doctor if there were any type of medical
specialist that would have significantly more use for the machine
than he did. When he answered no, I knew that this technological
breakthrough would be an economic failure.
The engineers had made a typical entrepreneurial mistake.
Rather than investigate whether a viable market existed, they
merely assumed that one did. It would not have been difficult for
them to do the same kind of delving that I did. Had they spent
a few hours investigating the device’s prospects from a market,
rather than a technological, perspective, they could have saved
themselves 18 months of work and more than $50,000.
Up-front research is important for any new business and essential
for one that involves anything new or different. In the case
of some more traditional businesses, the research method may be
well established and straightforward. For example, to determine
whether to locate a new convenience store in a given area, the research
largely involves checking traffic f low, competition, and
perhaps readily available neighborhood demographics.
In the case of something innovative, however, you need to at
least get an indication that the world (more accurately your target
niche) is interested in the product or service on which you propose
to base your business. The fact that you may think it’s a good
idea, or your wife or brother or friend thinks it’s a good idea,
doesn’t mean it’s marketable. And just because no one else is already
producing it doesn’t mean it’s marketable. In fact, if no one
else is already engaged in a similar business, a good question
might be Why not? Could it be that several have tried and learned
the concept just doesn’t f ly? Could it be that no one else has
thought of it? A littler digging into the reasons would be well
worthwhile.
To many lifestyle entrepreneurs, doing something new and
unique is an important reason for going into business. This is
laudable to be sure, but keep in mind that the traditional entrepreneur
has no such requirement. Copying the working model
for a convenience store, print shop, or any of thousands of exist ing concepts is fine with most small business people. That is why
franchise businesses are so successful—their pitch essentially involves
duplication of a model that is already proven to work, not
uniqueness, creativity, or self -expression. Starting a business
based on a concept that is in any way new or unique is starting
with an added challenge.
Even if a service exists that your target market clearly needs,
that fact alone still may not be good enough to assure a successful
business venture. Those in your target market have to know they
need the product or be ready to be persuaded that they need it.
Unless enough prospects are ready, willing, and able to become
buyers of your product or service, and unless you can reach those
prospects without unreasonable effort, you don’t have a viable
business.
At some point you’ll have to make the go/no-go decision and
in all likelihood with less than perfect information. Very seldom
can entrepreneurs know for certain that their venture will succeed.
However, you can and should take several steps to minimize
your risk by evaluating your prospects for success before you begin
your business. Some of those steps are explained below.
Email:
info@walmartcom.net
