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When you come up with a new startup idea, it’s natural to get excited. You want to get things moving quickly, and you start envisioning what life would be like if you were in charge of a massively successful organization. Unfortunately, before you even start looking for a domain name, you’ll have to begin the grunt work of research.
You’ll need to research your competitors, your key demographics, the financial feasibility of your plans and how other businesses have used a similar model in the past. It’s overwhelming for a new entrepreneur, and you may not know where to start—but that’s where this article comes in.
One of the easiest things you can do to fuel your learning process is to start reading blogs. Follow small business blogs, blogs written by entrepreneurs and blogs that apply to your industry. StartupNation is an excellent start, of course, and publishers like Entrepreneur and Forbes are good standbys.
You can also try digging into more niche applications. Consultants 500 has an impressive “list of lists,” organizing tons of resources that will point you to virtually any business blog you can think of.
Related: 7 Common Myths About Business Plans
Network with other entrepreneurs (and experts)
Your next step is to have conversations with other entrepreneurs and experts on subject matters related to running a business. Look around your area for networking opportunities for entrepreneurs and talk to your peers about their experiences. Ask them what they think of your business idea, especially if it relates to their niche, and talk to people you know in areas like sales, marketing and accounting to see what they think about the practicality of your business.
Find a mentor
While you’re at that networking event, consider looking for a business mentor. Rather than having a one time conversation with an expert, a mentorship will give you open, ongoing access to someone who’s built businesses successfully in the past and is willing to pass that wisdom on to you.
They’ll be able to provide you with pointers, information and advice, as well as be able to connect you with others who can provide you more specific information about your business. If you’re having trouble finding a mentor, you can rely on an organization like SCORE, or you can use a mentorship pairing service like MicroMentor.
Conduct primary research
Now is the time to start conducting some research on your own! You may need to consult primary resources, such as the United States Census Bureau or Pew Research Center, or you can take things into your own hands by conducting large-scale surveys or social experiments that help you understand your key demographics’ behaviors.
Ask specific questions before you dive into these areas. Keep in mind, your mentors and peers should be able to help you figure out what questions you need to ask.
Are you ready to make a business plan?
How do you know when you’ve done “enough” research? If at any point during your research, you’ve realized that your idea is not feasible, you’ve done enough research to walk away. But how do you know if your business idea is stable enough to create an entire business plan around?
- You’ve identified at least one competitor. Unless you’ve come up with something truly ingenious, there’s at least one major competitor out there. If you don’t know who that is or what they do, you haven’t done enough research yet.
- You know your weaknesses. It’s easy to come up with a list of strengths and advantages. But what about your weaknesses? If you don’t know what disadvantages your business has, you’ll need to spend more time digging.
- You’ve broken out of the “get rich quick” mindset. Your business won’t make you a millionaire overnight. You should have researched enough to have a conservative plan for revenue growth—and an understanding of when you might start to break even.
- You have numbers that could convince potential investors. Do you know how likely the average person is to buy your product? Do you have a sales forecast for the next five years? Do you have a firm idea of how much it will cost to get things running, compared to how much profit you’ll make? These are the numbers that will woo investors. Keep digging if you don’t have them.
If all these things are true, you’re probably ready to write the first draft of your business plan. Your research should never stop, because there’s always more to learn, and no matter the industry, there are always new developments in the business world. This is just the first step in your entrepreneurial journey, and it only gets more exciting from here.