Lucas Sommer started three successful music business
companies which he continues to own and operate profitably. His newest venture
is Audimated.com, a
game-changing site that is revolutionizing the independent music scene.
Currently, Lucas is a full time entrepreneur and won a $25,000 Pitch It contest
from WeMedia to apply towards Audimated. His educational background includes
specialties in finance, and music media and industry.
Coming up with good ideas is easy, but determining which of those ideas are worth pursuing and executing them successfully is hard. The key to turning your good idea into a profitable business is to test the viability of that idea by surveying your target market. Fortunately, there are ways to evaluate your next big idea with quantifiable, measurable and relevant data.
You do this by surveying your potential customers, with a tool designed to capture their opinions on your product or service.
It is important to collect a significant amount of this data from unbiased members of your potential target market. This means getting in front of people online and in person and talking with them about your concept. Make sure to look outside of your immediate social circle (family and friends) by interacting with people who have never interacted with you or your brand before.
Define Your Target Market
Who are your customers? How old are they? What are their hobbies and interests? What about their financial situation? Marital status? What languages do they speak? What is the average level of education? Identify your customer with as much detail as possible.
Asking these questions will help you determine the size and value of your target market.
How many people have the problem for which your idea is a solution? How much money does your total market of customers currently spend annually trying to solve this problem? Can you reach these people? Are there any major competitors currently dominating this marketplace? Is your solution better or more effective than theirs? Will you be able to compete? What makes you better or different?
Build a Survey
Use Google Docs to create a form to measure the “problem” your customers experience (you should be solving this problem). Ask several questions about how customers currently solve this problem. Let’s imagine we are considering starting a local bicycle shop in our community. Keep these questions in mind when creating survey questions for your business:
- Where are customers currently shopping for bicycles in the local area?
- How satisfied are customers with these current shops?
- What don’t they like about these other shops?
- How much do customers currently spend on bicycle related expenses each year?
Ask another set of questions about how customers view your potential solution:
- How interested would customers be in a new bicycle shop in your proposed location?
- What do customers think of the inventory you plan on stocking?
- How do customers feel about your proposed bicycle prices?
- How do customers feel when they see/hear your logo/brand name?
You want to be asking quantitative questions (questions with numeric answers) so that you can measure the data you collect accurately. Questions that can be answered with scales from 1-7 are great ways to capture customers opinions about where the store should be located, what bicycles should be in stock and how much they are willing to pay for them.
Focus on surveying unbiased members of your target market. Avoid family and friends, as their answers will likely skew your survey and lead to making decisions on inaccurate data. Visit malls, parks, schools, hospitals or wherever your customers frequent, and distribute physical surveys. For a bicycle shop, this means hitting the bike trails and talking to new bicyclists about your survey. Make sure to post the online version of your survey in forums, social media sites, websites, comments and other online locations that are relevant to your business. It is important to not “sell” your product before giving out the survey. Just let customers tell you how they feel without being prompted by your sales pitch.
Now that you know your customers, how many there are, how much they spend, what they think about your product or service and who your competitors are you can start to evaluate your idea. Weigh the results of your research and ask yourself, how good is this idea?
This article is reprinted with permission by The Young Entrepreneur's Council (Y.E.C.), which provides
its members with access to tools, mentoring, community and educational
resources that support each stage of their business’s development and
growth. Y.E.C. promotes entrepreneurship as a solution to
youth unemployment and underemployment.