Find A Market First, Then Build Your Small Business

The typical mistake made by most people in business is to get a product, build a business, and then find a market. I don't know why, but the natural way for almost all of us is to think of getting a product, building a business, and then finding the market.

However, the right approach is to first find a market, then get a product that suits that existing market, and then build a business to sell that product to that market. It makes sense, doesn't it? Yet it is so counterintuitive.

Here is that core idea expressed differently. If no one wants what you are selling,you have wasted your time.A market must exist, it is very first. It is very difficult, though not impossible, to create one. The presence of healthy competition is a good sign, it means there is enough business to support the players.

So now let's look at the steps you need to take.

1. Identify the market: Research, ask and research some more until you are sure you have found a good market that has plenty of people in it that you can reach easily and that you can have a chance to serve well and even dominate.

2. Study that market closely: Once you have identified a market, study it. Know the nature, location, amount, etc, of the demand in that target market.

3. Study the competition in that market: Learn from their operations and offers. How do they advertise? What language do they use? Who is the leader and why? How are their operations? How do they package their value?

4. Study the alternatives: Examine the alternatives your customers have. Your customers always have alternatives. For example, they can buy elsewhere, they can do something themselves instead of getting it ready-made, and so on. Once you understand what alternatives exist, you will understand what to include or leave out in your offer and why.

5. Niche out: Carve out your niche, the corner of the market that you have a good chance of dominating. Pick your battles wisely. Focus only on the areas of your strengths and forget the rest.

6. Test the relative importance of various benefits: This will help you determine what your people really, truly want. Discover and test what that key benefit is by asking your potential customers and simulating real-life scenarios.

7. Choose trade-offs: Determine your trade-offs, don't try to please everyone. Decide what your potential best customers in your niche desire and value most and do that and leave out the rest. For example, you might have a benefit list of 20 benefits you feel you can offer your customers. The smart thing to do would be to see which one, two or three of those benefits is of most importance to your customers. Focus only on the key, primary benefit and improve on it until you are the best at that most important benefit.

8. Prototype: Make a minimum viable product prototype, based on your research, and test it in the market. This will help you learn in real-life scenarios whether or not your business has a good chance of success.

9. Validate assumptions: List the critical assumptions you were making before you went to market, and then test to see if those assumptions are correct.

10. Design: If the test are successful, and your critical assumptions are valid, design a product or other form of value based on your findings.

11. Roll out! Build the business!

If you approach things in that way, you will raise your chances of success significantly.