Page 2: The business idea
An obvious starting point is the business idea. Many people think that they might have spotted a business opportunity. Translating that thought into action is another matter. There are many ways of coming up with a bright idea.
Many people are inspired by existing businesses. Tim O'Neil runs T&T Vision, a business that sells spectacles through an online shop on eBay. Tim got the idea for his business in his first year at university. His father bought a pair of reading glasses online. This seemed a good idea for an e- commerce business.
Before setting up a new business, there are important questions to answer. This requires market research to systematically gather, record and analyse data about the market for the planned goods or services. This is an ongoing process as markets are always changing. However, some market research is essential before starting any new business.
The research should attempt to answer questions such as:
- What is the target market for the new business' products?
- Who else is in this market? Is the idea already in the market? Can the new business offer something that existing businesses are not providing?
- Where are the customers based? What is the best way of reaching them?
- What do they really want? Can the product be improved?
- When do they want it? How should the product be sold or distributed?
- How much are these customers prepared to pay?
- How are they reached? What is the best way of promoting the product?
Secondary (or desk-based) research will answer many of these questions. Secondary research involves scanning already published materials such as reports, patents and statistical data.
This research will help a business to decide on its marketing mix. The marketing mix (or the four Ps), sets out the business offer in terms of:
- place (where the product will be sold or the service provided).