As an entrepreneur or anticipated founder of a new business, conducting a thorough market analysis is one important part of what you must do before taking the leap. In his book, 6 Secrets to Startup Success:How to Turn Your Entrepreneurial Passion into a Thriving Business, author John Bradberry says you need to consider your purpose. Why are you pursuing this venture? When it comes to market opportunity, he asks: Are you driven by a great product/service idea? Do you see an irresistible opportunity such as a timely market or an unmet customer need? Can you provide a better business solution for an existing problem?
Assessing the market opportunity can help you, the entrepreneur, discover a sense of demand and whether there is a market (or whether you can establish a market niche) to build a viable business. Of course, there are many other analyses and discovery processes you should work through (such as industry analysis, market segmentation, determination of your target market, how you will differentiate yourself through your positioning and value proposition, etc.), but by answering the ten questions that follow you can establish a fairly solid understanding of whether a real business opportunity exists for you and whether you can fill the shoes within the market. Furthermore, these questions will undoubtedly spark additional questions about your chances of successfully entering the market and establishing a place for your brand and your business.
- How large is the current market or potential market (in your target geographical area)?
- How fast is the current and/or potential market growing (or declining), and is it an emerging or mature market?
- Who are your competitors in this market and what are their offerings? Be very thorough.
- Who is already buying this type of product/service or something like it and why?
- Why is NOW the right time for you to enter this market?
Talk to clients/customers you have served (or potential clients in your target market) and get them to answer the following questions. The point is to answer these questions from your target market clients’ point of view.
- What are the shortcomings in the current offerings and what frustrations do they cause for clients/customers?
- What do customers complain about? What are their points of pain?
- What would customers really like to have that they don’t have/aren’t getting now?
- Question “top of mind awareness” among current or potential customers:
When you think of category X (the product/service that you are offering), which brand comes to mind first?
- Why does that brand come to mind first?
What other important questions do you think must be answered in order to thoroughly assess the market opportunity for an entrepreneur planning to launch a new business?