Why market research is imperative for start-ups
It is so easy to become enthusiastic and wrapped up in your brilliant idea for a new business that you can lose your objectivity. Further, as a consequence of the tough economic climate there are many people who perceive that starting a business is the only available route to replacing income as a result of job loss.
Regardless of how great an idea you and your friends think it is, have you taken into account what potential customers will make of it? One of the most common faults of new business plans is a lack of proper market research to support the business proposition.
To put your new venture into perspective you will need to provide detailed information on potential customers (different customer groups), competitors (both direct and indirect), suppliers (of everything you will need for the business), human resources (who you are going to need and how you will find them), and operations (the location of your office, the shop, etc.).
When you are starting out it is unlikely that you will be able to afford the services of a market research company to help you with all this, so you will probably be doing it yourself. But going through this process is a good way of making sure your feet are planted firmly on the ground.
If you can do all of the above and still think that the business has significant potential, you are far more likely to be able to persuade investors, and customers, to believe in you.