Researching your business idea. Part II

In continuation with the idea research topic we would like to deal with one of the most widely used approach to research which is known as SWOT analysis. SWOT stands for strengths, weaknesses, opportunities and threats. The strengths and weaknesses are considered on a wider basis and would include information about the specific industry as well. By strengths we mean the strengths of the industry, the product or the service. Weaknesses would include the weaknesses related to the industry, the design or the pricing of the product or service. The threats are what the business will face from competitors and the economy in which it operates. Opportunities are the unexplored areas which the business can use to rise. A detailed SWOT analysis would consider almost everything that is relevant to a business.

Whatever methodology you propose to use for the research, the emphasis should lie on meeting up with the research targets that were laid down in the idea conception stage.

Now e shall focus our attention towards assessing the kind of competition that your business will face. The best way to do this is by putting yourself into the customers shoe and trying to figure out how the buying decisions are affected with different strategies being used by different businesses in the same line. You must also make an effort to understand how the competitors customers feel about their product or service that is what are their likes and dislikes. From this you will be able to figure out what changes you need to make in the product or service so as to remove the dislikes that the customers for such products or services have with the existing products or services in the market.

The basic aim of this activity should be to look for areas in which you can improvise and thus beat the competition. Improvisation could mean anything like better quality, added features or cost effectiveness that is something that will give you an edge over the others in the market. This will help you to move in the right direction once your business is in process.

Coming back to the original research topic, it happens quite often that after having done a complete research and analysis you may find that your business idea doesnt look like anything good enough, so what do you do in this case.

With such a situation in front of you it is not necessary that you may have to drop the idea all together, instead you may need to rework on the idea taking a different approach this time. In the research and analysis phase you may have spent a lot of money and time and you definitely dont want to lose out on that. So in such a situation you need to refocus your efforts to first find out to why and where does the idea need to be examined under a different light. But that is true only when you feel that the weaknesses that you have encountered in your idea can be overcome with some efforts. But if the weaknesses are beyond repair, it maybe a better decision to dump with this idea and pick on something different.

Mostly, you should be able to go ahead with the same idea after doing a bit of fine-tuning. Dont lose hope too early instead spend some time reconsidering where you have gone wrong and what possible changes can be done which could increase the effectiveness of the business idea. It is quite possible that after reconsideration and making some minor twists and turns, you could make the same idea a very viable and a profitable business proposition. So if your business idea looks totally flawed, it may not really be the same case when you approach it from a different angle and a different perspective.

With all this done you would have in front of you an immensely practical and a viable business idea. But a little before your implementation idea there is one important consideration and that is the pricing of the product or service. Your prices need to be increasingly competitive so as to let you enter and grab a piece of the market share, and this is true especially for the products or services which have a very close competition.

When your product or service has something unique which the competitor does not offer, you can start with a slightly higher priced strategy and in case if it does not work out, you can come down a bit on the price to make it equal to or closer to the competitors price. It is your very own business so you can try and experiment with a few different pricing strategies before settling down onto the most suitable and profitable pricing strategy.

The price that you charge for the product or service must be justified with the value the product or service delivers to the customers.

Another important consideration is where exactly to sell your product; the place of selling should be the place where you expect your target customers to be. This would require setting up of a proper retail distribution system in case of physical products or even in case of some services. If youre into internet business you need to figure out how your target customers will reach your website.

Towards the end we would just like to emphasize that developing, analyzing and processing a business idea would mean a lot of efforts on your part especially with regard to the information that you would require at each step. And there is no scarcity of information in todays world; you can get the required information from almost anywhere like the library, business schools, specific magazines, trade shows and certain government agencies which help with the development of new businesses.