Before you start a business or tries to expand your business into a different market, it is imperative to conduct proper market research. For this article, I have put together a calculator that produces a score of how relevant your business is. I based it on an excerpt of the same title from Personal MBA, a renowned book on business.
Look at the market you want to challenge and rate each of these factors from 0~10 (0 is extremely unattractive and 10 is extremely attractive). When in doubt, be conservative with your estimate.
How badly do people want or need this right now?
0Renting an old movie is typically low urgency.
Seeing the first showing of a new movie on opening night is high urgency, since it only happens once
What is the highest price a typical purchaser would be willing to spend for a solution?
0Lollipops sell for $0.05、
aircraft carriers sell for billions
How much would it cost to create and deliver the value offered, both in money and effort?
0Delivering files via the Internet is almost free
Inventing a product and building factory costs millions
How quickly can you create something to sell?
0You can offer to mow a neighbour's lawn in minutes.
Opening a bank can take years.
Are there related secondary offers that you could also present to purchasing customers?
0Customers who purchase razors need shaving cream and extra blades as well
Buy a Frisbee, and you won't need another unless you lose it
When you're done with your assessment, add up the score. If the score is 50 or below, move on to another idea–there are better places to invest your energy and resources. If the score is 75 or above, you have a very promising idea–full speed ahead. Anything between 50 and 75 has the potential to pay the bills, but won't be a home run without a huge investment of energy and resources, so plan accordingly.
How many people are actively purchasing things like this?
0The market for underwater basket weaving courses is very small
The market for cancer cures in massive
How easy is it to acquire a new customer? On average, how much will it cost to generate a sale, in both money and effort?
0Restaurants built on high-traffic interstate highways spend little to bring in new customers
Government contractors can spend millions landing major procurement deals.
How unique is your offer versus competing offers in the market, and how easy is it for potential competitors to copy you?
0There are many hair salons, but
very few companies that offer private space travel
How much will you have to invest before you're ready to sell?
0To be a housekeeper, all you need is a set of inexpensive cleaning products.
To mine for gold, you need millions to purchase land and excavating equipment.
Once the initial offer has been created, how much additional work will you have to put into it in order to continue selling?
0Business consulting requires ongoing work to get paid
a book can be produced once, then sold over and over as is