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Researching A New Business

1. Focus on filling a niche.

A niche is a specialized segment of people that are looking for your specialized product. For example a pet store is a broad market but a store that caters to small breeds or toy dogs is a niche market.

You likely already have a good idea about who your market is or may be. Research it to make sure. Find out if there is a way to narrow the niche even more. Use the following tools to help you research your niche:

- Keyword research
Use keyword tools such as the overture suggestion tool (http://inventory.overture.com/d/searchinventory/suggestion/) or Wordtracker (http://www.wordtracker.com/) to find out how many people are searching each month on keywords related to your niche product. If there are millions of people searching for your product, then you likely have a million competitors.

- Take a survey
Speak to people in the industry and ask them questions. You’ll want to ask about demand for the product, target markets and demographics, and needs that aren’t currently being filled

- Create a Unique Selling Position (USP)
Study your competition to find out what they emphasize about the product which makes them stand out from the crowd. Then find something that will make your business unique from the others. It could be something unique about the product or you could choose a more highly defined target market.

2. Brainstorm with friends and family.

You’d be surprised what interesting and new perspectives people can give you when it isn’t their money or future on the line! You can use friends and family to generate business ideas or you can ask for their input on your ideas. Ask them how you can improve your idea and who might be interested in your products or services.

3. Utilize discussion forums.

Forums, business chat rooms and blogs are a fantastic resource. It is an excellent way to get a feel for the market, get feedback from people in the industry or people interested in your product or service and it is an excellent way to build relationships with other professionals.

4. Utilize professional organizations to gather data on your chosen business.

Visit your local Chamber of Commerce, the National Small Business Association, your local small business association, the National Association for the Self Employed, National Federation of Independent Business and the National Foundation of Women Business Owners are all great places to start and they’ll have excellent financial advice on how to get started.

5. Research your competition both locally and online.

Look for ways you can gain an advantage over your competitors. Determine how your business will be better and different. Evaluate their websites, how can you position yourself online?

6. Define the operation of your business.

Here are some key questions to answer:
• What skills and experience do you bring into the business?
• What are your fixed costs and expenses?
• How long will it take to make a profit?
• What laws do you need to comply with?
• If you need financing where will you get it?
• Do you need insurance coverage specific to your business?
• What will be the legal structure of your business?
The small business association and the IRS web site are both excellent tools to help you answer these questions. Remember that with many online businesses, the startup cost is minimal, some only requiring a website.