2.Many people have great ideas, but their businesses flounder in the marketplace because there
really isn't an audience for their product or service. Thorough research will help support expectations
about a business's success as well as uncover any potholes in your thinking. Ask yourself
What problem does my product or service solve?
Who will buy my product or service?
Why will they buy it?
Where will they buy it—specialty shops, department stores, mail order, online?
What do I need to charge to make a healthy profit and will people actually pay that?
What products or services will mine be competing with?
No business—particularly a small one—can be all things to all people. The more narrowly you
can define your business and your target market, the better. So it's crucial that you create a
niche for yourself in the marketplace—it's the key to success for even the biggest companies.
Wal-Mart and Tiffany's are both retailers, but they have very different niches: Wal-Mart caters to
bargain-minded shoppers, while Tiffany's appeals to upscale jewelry customers.
To find out if your business idea has a chance of succeeding in the marketplace and to help you
create an effective marketing plan, you'll need to do more than just answer the questions listed
above. You'll also need to conduct more formal market research.
First, meet with a consultant, talk to a business or marketing professor at a local college or university,
or contact your local Small Business Development Center (www.sba.gov/sbdc). These
sources can offer guidance and help you decide exactly what information you need to gather.
Generally, you'll need to collect information on three crucial aspects of your business: industry
information, target market and your competition