In yesterday’s post, we looked at the importance of conducting research prior to the point of company formation. We reviewed various methods of gaining consumer and market insight and showed how, if conducted correctly, these methods wouldn’t require a huge budget. In today’s post we look at the next stage of market research; feasibility study.
If the first stage of research into your business concept, revealed positive results, the next step is to conduct a feasibility study. This study can take many forms; it could be a formal document which you will present to prospective investors or it could take the form of a ‘working document’ in which you devise a number of questions which will help you decide how to progress your idea.
Regardless of which form your study takes, there are a couple of issues every feasibility study should address:
1. Your proposition: How is you product or service different to what is already available? What is your route to market?
2. How will your company be managed? Will you manage the day to day operations of your company or will you employ someone to oversee?
3. Your Customer: What is their demographic profile? Who are they currently buying from? What is their existing spend? What other consumers could you target? What sort of advertising will they respond to and how much will it cost to gain a share of voice?
4. Who are you up against? Identify your competitors, how is your proposition different and better? How do they currently advertise and communicate with their consumers? What mistakes have they made? What are their plans for future growth?
5. The financials: How much will it cost to get your company up and running? How do you plan to finance your company?