Only about half of small businesses with employees survive at least five years, according to the U.S. Small Business Administration. The first line of defense against failure is making sure your business idea has real potential in the first place.
Before you start researching how to create an ecommerce website, make sure you’re building your business on a solid foundation. The first step is taking the time to research the potential of your business idea.
Define Your Audience
One of the first areas of business you’ll need to figure out is defining who you’ll be doing business with. Who are your customers? The more specific you can be, the better. Are you selling funny t-shirts to adults? Or are you selling sassy t-shirts to women ages 18 to 34 who own French bulldogs?
The second part of this question is how will you reach your customers? Are there blogs, forums, Facebook groups, or other spaces online where your potential customers hang out? Don’t try to reinvent the wheel. It’s best if a community already exists that would benefit from your products.
Identify the Problem or Need
At a fundamental level, the purpose of a business is to solve a problem or fulfill a need or desire for its customers. What is the specific problem, need, or desire that your business addresses? The better your products scratch an itch, the more successful your business will likely be.
Research Potential Competition
When you Google your business idea and other businesses pop up, don’t be too discouraged. A healthy amount of competition can be a good thing. It shows there is a viable market and customer demand. On the other hand, if there’s a lot of competition, and the competition is very, very, strong, you’ll either need to differentiate yourself or find a different market.
Researching your competition can also lead to many other helpful insights. For instance, running a quick backlink report on your top competitors can lead you to industry blogs they’ve been featured in and influencers they have worked with. Checking out competitor social media profiles can reveal relevant hashtags and influencers as well.
Solidify Your Unique Value Proposition
What is the unique benefit you offer your customers that distinguishes you from your competition? This is called your unique value proposition (UVP), also known as your unique selling proposition (USP).
A UVP is not a slogan, catchphrase, or a buzzword-stuffed mission statement; it’s simple language that describes your offering, how your customers benefit, and why it’s better than the competition.
Defining your UVP early in the process can help guide the entire direction of your business. If you can’t come up with a strong UVP, keep working at it until you can. Otherwise, pivot!
Create Your Minimum Viable Product
A minimum viable product (MVP) is simply the most basic version of a product you can get out the door. The faster you can get a product into the hands of real customers, the faster you’re able to learn about the potential of your business idea.
You may not even need to create an actual product to get this valuable feedback. You could create a pre-sale offer or build an email list of interested buyers. The goal is to get real data as soon as possible to better inform your decisions and the validity of your offer.
Starting a business is an exciting new venture. Many entrepreneurs get swept up in the thrill of business building without doing due diligence. As a new business owner, the best thing you can do to get your company off to a great start is to research the potential of your business idea first. You’ll be grateful you did!