In business startups, what comes first? The chicken, or the egg? Typically, in new business startups, the first step is to develop a business idea or concept. What does that mean? It is a process that involves identifying a need or gap in the market. The next step is to formulate a plan on how to fill that void. Once the plan is created, then the next step is to conduct market research to validate the idea. This ensures there is a gap in the market and also continued demand for the product or service.
After receiving results from the market research activity, then the business owner begins to secure funding and create the necessary infrastructure and resources to launch the business. During these actions it is also important to consider factors such as legal requirements branding and marketing strategy.
Overall, the order in which these steps are taken may vary depending on the specific needs and circumstances of the business startup. However, having a clear understanding of the business idea and conducting thorough research, are considered the foundational steps in starting a successful business.
Recently a new business startup approached me to discuss their business idea. It is a complicated model in which they couldn’t tell me how any of their ideas will work. Since they weren’t sure how to launch, they hired a marketing company to begin a branding process. I asked them, “What are you branding?”
They replied with a company name and logo. I explained they should stop wasting their money until they can describe their ideal customer and why this customer will buy from them?
In all of my startups and those of other businesses in which I guide, I always start by building a marketing foundation. The idea of a market gap or need is a given. Entrepreneurs create businesses by seeing a need in the marketplace where they or other people they know cannot get product or service fulfillment.
Typically the next step in a business plan is market research. A good marketing research program can cost as little as a few thousand dollars to tens of thousands depending on the size of the target customer base and complexity of the product or service being sold. Since small business startups usually have no funds, they skip the market research activity in building a solid business plan. In these cases, I advise entrepreneurs to keep their startup small.
By using a WAG (wild ass guess) method of marketing, and keeping the target audience tiny and the value statement down to one of three emotions, the startup will have a more affordable method to know if their business idea works.
Written by Darlene M. Ziebell
Join our mailing list to receive the latest news and updates from my blog.
Don't worry, your information will not be shared.
Sign up now for your copy of E-List - 8 simple tips to grow your business now!
We don't spam