Business idea must not only sound good; they must be commercially viable. Speaking to an experienced businessperson may help. Customers must feel there is long-term value in your products or will be unlikely to buy from you. Also, this value must be clear — murky benefits will be difficult to sell. Your business idea must work within the constraints of a start-up business. Likewise, inventions may require such large amounts of start-up capital to render them untenable.
If your business idea focuses on a product, speak extensively to manufacturers before starting-up to ensure you can get the product produced cheaply enough in the early stages.
Over the years countless venture capitalists, founders, and product professionals have offered their own interpretations for the term, but at its very core product-market fit is all about creating a product that not only meets the needs of your customers the market , but does so in a way that is better than the other existing alternatives. Dan Olsen, a product management consultant, expands on this topic further in his framework; the Lean Product Process , to help businesses achieve product-market fit.
As you conduct more market research and begin segmenting your customers, you may find that your initial hypothesis may change. Some characteristics you should include in your personas are customer demographics, behavior patterns, motivations, and goals.
Whether you call it pain points or customer needs, the underlying principle is the same, the success of your product in the market will depend on its ability to address the underserved needs of your target customers. A good market opportunity exists when your software or service is able to create value for customers.
Having a clear value proposition helps distinguish your product from others in the market by outlining exactly how your product plans to meet customers needs better than the alternatives. You may uncover a handful of unmet customer needs during your conversations with your target customers, but it may not be feasible to try and go after the entire list.
In fact, when the interest in a product is so high and so stable over an extended period of time, you might even be able to build an entire business around it. For example, usually, the interest in hand sanitizer is extremely low, but when the Covid pandemic hit in March , it went through the roof:. Source: Google Trends. People who seized the opportunity to cash in on this sudden surge in demand probably made a good profit within a short time. You want to have viable products as your foundation and rely on trending ones to supplement your income.
To understand if you can succeed in a new market, you need to know who you are up against. The more you know about your competitors, the easier it will be for you to gain and maintain a competitive edge.
Specifically, analyze them by:. Using this data, create a set of buyer personas — fictional characters that represent a typical member of your target audience. The ideal buyer is someone who knows they have a problem, can afford a solution you propose and have a history of using similar products.
How do you evaluate a product for sale? Consider doing the following product viability assessment:. You can build a thriving business by selling large, heavy products.
Burrow — an online furniture vendor — is doing just great. However, selling bulky products makes logistics more complicated. This is especially true when it comes to shipping.
It goes without saying that shipping large items for free and fast can be challenging. Another issue that you want to avoid is product breakage.
Damaged goods stand for money lost. And also harm your brand image. An unhappy customer might take their frustration to social media. Unless you have past shipping experience and a reliable logistics partner, avoid dealing with fragile products. You want to find a sweet spot right between being competitive and still making a healthy profit. Positioning is important here. If you present your product as a commodity, you will find it difficult to charge a lot for it. However, if you present it as a one-of-a-kind item that resonates with the values of your potential customers, you will be able to command much higher prices.
How much can you charge on top of the price that you paid for it? Note that brand markup must be high enough to cover the business expenses and generate enough profit to make it worth your while. The more SKUs you have, the more complex the logistics of your business. You need to keep track of them all, make sure that you send the right product to each customer, etc. Thus, you may want to start with a smaller inventory and add more products as your business expands.
Does the demand for this product remain stable throughout the entire year or go up and down as the seasons change? Again, you can do well with seasonal goods. For example, Black Diamond Equipment sells climbing, skiing and snowboarding gear. Apply market research to generate audience insights. Measure content performance. Develop and improve products.
List of Partners vendors. Table of Contents Expand. Table of Contents. What Is Business Viability? Viability vs. By Jean Murray. Learn about our editorial policies. Updated on November 15, Viability A general assessment of whether a business is or will be successful Involves multiple aspects of a business, including marketing and financials.
Solvency An assessment of whether a business has enough money Often measured using a current ratio. Viability An assessment of the overall business model, not just finances Looks at both short- and long-term profitability. Liquidity Short-term measure of financial health Looks at the ability of a business to quickly turn assets into cash.
0コメント