How to Research Your Business Idea

Somewhere between scribbling your idea on a cocktail napkin and actually starting a business, there's a process you need to carry out that essentially determines either your success or failure in business. Oftentimes, would-be entrepreneurs get so excited about their "epiphanies"-the moments when they imagine the possibilities of a given idea-that they forget to find out whether that idea is viable.

Of course, sometimes the idea works anyway, in spite of a lack of market research. Unfortunately, other times, the idea crashes and burns, halting a business in its tracks. We'd like to help you avoid the latter. This how to on researching your business idea is just what you need to keep your business goals on track.

The Idea Stage

For some entrepreneurs, getting the idea-and imagining the possibilities-is the easy part. It's the market research that doesn't come so naturally. "It's a big red flag when someone outlines the size of the market-multi billion dollars-but doesn't clearly articulate a plan for how the idea will meet an unmet need in the marketplace," says Aaron Keller, an adjunct professor of marketing at the University of St. Thomas in neighboring St. Paul and a managing principal of Capsule, a Minneapolis-based brand development firm.

Checking Out the Competition

Assuming your research process has helped you uncover your competition, you now need to find out what they're up to. Shenker advises becoming a customer of the competition, whether by shopping them yourself or by enlisting the help of a friend. "Visit their Web site and put yourself on their list," she says. "Talk to your competitor's customers, too-ask them what they like or don't like about your competitor's product or service. If you conduct formal research, include a question like 'Where do you currently go for that product or service? Why?'"

Your aim is to understand what your competition is doing so you can do it better. Maybe their service is poor. Maybe their product has some flaws-something you'll only know if you try it out yourself. Or maybe you've figured out a way to do things better, smarter, more cost-effectively. Find your selling point. It's going to be the core of your marketing program, if and when you're ready for that step. It's also going to be what sets you apart and lures customers your way.