Market Test Your Ideas First

Market Test Your Ideas First

A Romantic Pitfall

In my last post I talked about the crazy way that many new business owners fall in love with the idea of owning a shop. When I use the phrase “fall in love with the idea” that is exactly what I mean they don’t fall in love with the reality of:

  • Paying the rent
  • Staffing the shop themselves, six days a week
  • Paying back the loan they took out to buy the stock
  • Waiting for somebody, just somebody to walk through the door and buy something

You need to fall in love with the idea of servicing customers, not with the romantic notion of owning a business

Instead they should be falling in love with their customers wants, they need to fall in love with the idea of servicing their customers, stocking the things they want to buy and making it easy for them to buy.

In my last post I used an example of a bathroom shop that was set up by a guy who fell in love with the idea of owning a shop.

He spent his entire budget on a lease, signage, but the majority of his budget was spent on stock.  This was before he conducted any market research at all.

He managed to last 12 months, we did speak with him about helping him sell online, but by that time it was too late and he had no money left to take a different path.

So what should he have done?

Before going out and spending tens of thousands on stock, he should have done his research.

You can conduct market research whilst putting money in your pocket, invest once you have proven your concept

The key is to identify the market you are targeting and then finding out what they want to buy, sounds simple eh?

Instead of sinking your life savings into a pile of stock that you don’t know if it will sell, spend some money on testing the market and seeing what will sell.

How about setting up a simple website, with some select products, run some PPC advertising, take some orders, drop ship the products or give a realistic delivery date that will enable you to source the products.  Then reinvest the money in more advertising, this way you will be conducting market research whilst putting money in your pocket.

All this without forking out thousands on stock.

Use some of your marketing budget to direct market homes in your target area, use a direct response approach, offer your customers something of value, you’ll be amazed at home many people will invite you round or visit your website for more information.

Only once you have a great handle on your business, with a proof of concept should you consider investing in a retail store.

I would bet though, that by the this time you may not want a retail space any more, you may find that you have fallen in love with selling 100s if not 1000s of units out of a warehouse direct to your market.

So instead of sitting in a shop, surrounded by stock, waiting for someone to walk through the door, you could be sat at home pawing through your analytics and analysing your latest successful SEO campaign.

Don’t forget to leave your comments, thoughts, ideas and feedback below.

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