Testing your new business startup idea
Why you need to test your idea
Your friends and family may 'agree' you have a great business idea, but that may not be the case!
It's difficult for them to take an unbiased view, and even if they don't think it's great they'll find it very difficult to tell you so.
If they do like it that's a very good start, but having a great idea needs to be proven in a more reliable way. Getting inaccurate feedback will not help, and will almost definitely hinder, your business plan. Even if you've created a detailed business plan, objective research will give you accurate factual data that gives a true picture of your businesses potential, and can be validated.
Getting objective feedback
Getting objective views and comments is vital to your success so you should take a scientific approach to finding out what your potential customers think:
- Will they be interested in buying your product?
- Will they be prepared to pay the price you want to charge?
- How far are they willing to travel to get to you?
- Would they prefer to purchase online, by post, or in person?
These are only some of the questions you need to ask to get a good indication of your business's potential. And it'll also show who your best target customers are - and it may not be who you thought they'd be.
How to research your market
Get the views of
- Family
- Friends
- Friends of friends
- Contacts on social networks
- If you’re selling from a shop ask passers by
- If you’re selling to local business ask for a meeting
- Suppliers
Ask people individually or gather them together into small focus groups
TOP TIP: Create your questions before you start. This will help make sure you don’t miss anything important, and because you’ve asked everyone the same thing it will help you compare the results. Try to present the questions as if you have no connection with the idea. That way people won’t be tempted just to give you the answers you want to hear!
Do a SWOT analysis
Take time to create a complete analysis of the Stengths, Weaknesses, Opportunities, and Threats you'll face when you take your product to market. Ask anyone who understands what you're trying to do to contribute.
DO a PEST analysis
More information on how to do a PEST analysis
Find related research and reports
Look for general economic reports and any specific reports on your industry. Search for them online or visit a local library.
Visit our
free market research resources page for some ideas of what's available and where to find it.
Check out the competition
Don’t be afraid to approach your competitors as if you’re a potential customer, or even as a real customer. The best way to find out what you’re up against is to understand what’s good and not so good about your competitors’ business. Then you’ll find it easier to make yourself better than them!
Formal research
Undertaking formal market research can be expensive, but so can getting your product and business model wrong! So take advice from the experts but have a budget and stick to it, and have a very clear idea of what you do and don't want. The Market Research Society publishes a
Directory of Market Research Agencies who will all adhere to the Market Research Society’s Code of Conduct.
Online market research
Doing market research online provides a cost-effective way to get quick feedback from a large number of prospective customers. Online market research specialist Marketest has 10 years’ experience and over 950,000 panelists. Ask for a
free quote for online market research to see how cost-effective can be.
Further guidance on how to research your market
The Market Research Society publishes a very useful guide for businesses new to market reseach. View it here:
‘Market and Social Research For Newcomers’ guide (opens a pdf document)
Testing your new business startup idea
Why you need to test your idea
Your friends and family may 'agree' you have a great business idea, but that may not be the case!
It's difficult for them to take an unbiased view, and even if they don't think it's great they'll find it very difficult to tell you so.
If they do like it that's a very good start, but having a great idea needs to be proven in a more reliable way. Getting inaccurate feedback will not help, and will almost definitely hinder, your business plan. Even if you've created a detailed business plan, objective research will give you accurate factual data that gives a true picture of your businesses potential, and can be validated.
Getting objective feedback
Getting objective views and comments is vital to your success so you should take a scientific approach to finding out what your potential customers think:
- Will they be interested in buying your product?
- Will they be prepared to pay the price you want to charge?
- How far are they willing to travel to get to you?
- Would they prefer to purchase online, by post, or in person?
These are only some of the questions you need to ask to get a good indication of your business's potential. And it'll also show who your best target customers are - and it may not be who you thought they'd be.
How to research your market
Get the views of
- Family
- Friends
- Friends of friends
- Contacts on social networks
- If you’re selling from a shop ask passers by
- If you’re selling to local business ask for a meeting
- Suppliers
Ask people individually or gather them together into small focus groups
TOP TIP: Create your questions before you start. This will help make sure you don’t miss anything important, and because you’ve asked everyone the same thing it will help you compare the results. Try to present the questions as if you have no connection with the idea. That way people won’t be tempted just to give you the answers you want to hear!
Do a SWOT analysis
Take time to create a complete analysis of the Stengths, Weaknesses, Opportunities, and Threats you'll face when you take your product to market. Ask anyone who understands what you're trying to do to contribute.
DO a PEST analysis
More information on how to do a PEST analysis
Find related research and reports
Look for general economic reports and any specific reports on your industry. Search for them online or visit a local library.
Visit our
free market research resources page for some ideas of what's available and where to find it.
Check out the competition
Don’t be afraid to approach your competitors as if you’re a potential customer, or even as a real customer. The best way to find out what you’re up against is to understand what’s good and not so good about your competitors’ business. Then you’ll find it easier to make yourself better than them!
Formal research
Undertaking formal market research can be expensive, but so can getting your product and business model wrong! So take advice from the experts but have a budget and stick to it, and have a very clear idea of what you do and don't want. The Market Research Society publishes a
Directory of Market Research Agencies who will all adhere to the Market Research Society’s Code of Conduct.
Online market research
Doing market research online provides a cost-effective way to get quick feedback from a large number of prospective customers. Online market research specialist Marketest has 10 years’ experience and over 950,000 panelists. Ask for a
free quote for online market research to see how cost-effective can be.
Further guidance on how to research your market
The Market Research Society publishes a very useful guide for businesses new to market reseach. View it here:
‘Market and Social Research For Newcomers’ guide (opens a pdf document)