So you have an idea for a business, do you? You’ve really given it some though and it seems to make sense? Wan’t to know how to test your theories with a little bit of quality Startup Research? Here are five things that might help!

Thing One: Do all your own Research

There are hundreds of organisations that offer research services and we don’t want to diminish the good work that they do. However, when you are starting a new business doing your own research is the only way to go. 

First of all you get a far better understanding if you hear answers first hand rather than translated through someone else. You pick up nuances in responses and the little tidbits of information that might be incredibly helpful to you but lost in a formal report. You can manipulate your own data at no cost and change your research brief of the fly as you learn. Best of all it costs you nothing and if you are starting a business you’re going to need to save the pennies! 

Thing Two: Get Talking to Potential Customers Immediately

Two minutes of trying to sell to a real customer and watching them use your product will tell you more than weeks of desk research ever could. When it comes down to it if your customers’ feedback is the most important data of all.

To get the most out of customers try to make a prototype for them to interact with, even if it needs to be made out of string sellotape and lego. Take their ideas and advice and build a new prototype. If you can, try to get customers to pay you. Many people will tell you they like a product or service (when using it is free) but when it comes to the crunch they wouldn’t pay for it. 

One final note: Don’t test on your friends and family, they aren’t your customers and they will always be too supportive. Try to find fresh eyes out on the street or through online communities.

Thing Three: Google

Google is an enormously powerful tool for researching business ideas. Sign up for Google Ads and use the keyword tool to find out what people are looking for online. Create a web page with an early sign-up for your product / service and see what level of interest it receives. Try pointing a Google Ads campaign at it and see what the cost per click is - how does that benchmark against other businesses? 

Google is also the best place to start your competition analysis. Create a table and capture data for each competitor. What do they sell and where? How do they price? What’s their USP? How many customers do they have? How do they deliver their business? Etc.

Thing Four: Become an Accountant

We don’t really mean for you to qualify as an accountant, but there is a huge benefit in reading through the financial reports of your competition.

We have done a lot of work with Fintech and Challenger Bank start-ups. In the banking world the assumptions that drive a business case are very mature and somewhat set in stone. Yet we see so many companies that have assumed huge gross profit margins or low costs of acquisition. Reading the accounts of their competition to get an idea of ‘what normal looks like’ would stop them making silly mistakes that delay funding or ultimately end in failure.

Work out what kind of profit margins your competition achieve and what kind of cost base they have. If you have assumed better positions you need to be able to evidence why you can do better than an experienced trading business. 

Thing Five: Use all of The Free Resources Available to You

There are so many resources available for businesses locally, nationally and through trade associations that you can get swamped. 

Reach out to anyone that might be able to offer relevant help and listen to what they have to say / read what they provide. You will often find that there are free data sources and reports that you can use to validate your idea or the assumptions in your business case. 

If you want further help and advice you can always contact us or reach out to the good folk of www.siliconcanal.co.uk