Business Concept based on Trends

Many of you may have thought about starting a business at some point in time. Many of us have thought about a new invention, process or production improvement that we may be able to patent and call our own. But before we can expect to make some money on our idea and build a business there are some things that we must investigate before we venture out and spend our own money and the money of others to start a business.

We also need to know what makes a business, company or project interesting to an investor. Why would an investor put money into one business and not another. What is the attraction?

Trend Analysis
One of the things we must look at is what are the trends that are happening today? What situation is developing where consumers are buying items that are creating a trend. What are the needs of today's society and what are the characteristics of that society? What is happening in your region or in the United States? If we are catching a trend from the beginning of the trend, then we can be assured that our sales will be growing with that trend as the trend catches on. Trends last for a period of at least 10 years. So we can be assured that our sales will be growing and we will be around for 10 years.

An investor would look at the trends and compare the potential market growth to your sales trend. Are your sales increasing and growing in market share? Are you and your management team capturing the market with your product, and are you capable of maintaining that growth with your expertise and acumen? Would you gain the confidence of an investor or a banker?

Another thing to think about is whether we are able to change the way people do things. Are we making life easier or more convenient for them with our product? Take a look at Amazon.com. Amazon.com changed the way people purchase books. Consumers no longer have to go to a "bricks and mortar" store to select their books. They merely go to the Internet at Amazon.com and put in a title or author and all the books available are listed as a result of that search. The customer orders the book and it is delivered within a week to their door. You don't even have to go outside! After you read the book, you can sell it on Amazon.com, and you can read critiques of the book and offer you own. With this direct mail ordering, Amazon.com can afford to offer their products at a lower price than the competition.

Think about Starbucks, the coffee vendor. Starbucks started in Seattle, Washington where people were developing and acquiring tastes for flavored coffee. Starbucks' management realized the trend was growing in Seattle and grabbed onto it. Now Starbucks locations can be seen in many cities across the United States. Starbucks hit on the fact that Americans were interested in flavored coffees and developing a taste for good coffees. Not only was this taste developing, but Americans were willing to pay the premium prices that Starbucks charges for this richly brewed java! Starbucks provided an environment where patrons could read their daily newspapers, read their email on their lap tops while sitting and enjoying their coffee at their leisure.

Market Research Required
Another consideration that we must think about is whether someone out there would be interested in purchasing our product or even visiting our retail store. We have to do our market research from two perspectives: who is our consumer and who is our competition. Who are the consumers we want to attract? Do they have the right demographic profile: age, gender, income level, education, etc. to be able to purchase our product and even enjoy it? Moreover, what do they buy, what motivates them to buy, and why would they purchase your product? Competition can be fierce or weak. We must know what we are up against in the way of product offerings and also become aware of potential changes to product development which may threaten our own product offerings.

Importance of Market Research

Another consideration we must think about is whether someone out there would be interested in purchasing our product or even visiting our retail store. We have to do our market research from two perspectives: who is our consumer and who are our competitors. Who are the consumers we want to attract? Do they have the right demographic profile: age, gender, income level, education, etc. to be able to purchase our product and even enjoy it? Moreover, what do they buy, what motivates them to buy, and why would they purchase your product? Competition can be fierce or weak. We must know what we are up against in the way of product offerings and also become aware of potential changes to product development which may threaten our own product offerings.

SWOT Analysis

In earlier essays we discussed SWOT analysis as a way of investigating our own personal abilities to become an entrepreneur. We can also use SWOT analysis to investigate the competition. Knowing the competition is critical. After all "Business is War!" General Colin Powell or General Schwartzkoff wouldn't commit our military to battle if they didn't know what they were up against. We must know everything about our competition, especially their strengths and weaknesses. You wouldn't go to war and not know what you are up against!

With competitive SWOT Analysis we look at the competition's strengths from every aspect: product, price, distribution and promotion. We also look at their weaknesses. And then we compare our own strengths and weaknesses to theirs. What makes our product or idea so much better than theirs? If we cannot identify a competitive advantage over the competition, or be able to differentiate our product in a meaningful way, then we should not proceed with our idea.

Our business concept must be fully explored in order to be successful. Why would someone want to purchase your product or venture into your store? The question is "Will the customers come, and will they buy?"

SWOT Analysis

To be able to determine whether you have what it takes to be an entrepreneur, you must perform a self-examination of your strengths and weaknesses or a SWOT analysis.

A SWOT analysis contains the following 4 areas of introspection:

S - Identify your strengths. Imagination, ability to sell yourself and your ideas, persistence, confidence, and expertise in a particular industry, as well as personal and business potential, etc.

W - Identify weaknesses. Is there a time limitation, a health issue, no management experience, lack of financial stability, or lack of people skills?

O - Identify opportunities. Is there an opportunity for an internship prior to opening the business to establish a network of resources, or to take courses that will prepare the prospective entrepreneur for business ownership?

T - Identify threats. Consider such issues as health concerns, lack of financial stability, and personal or family issues.

To further expand upon the above and to assist you in thinking about your SWOT analysis, I have included below some self-assessment questions for you to consider:

• What do you see yourself doing over the next two to five years?
• What are your personal goals?
• Why do you want to open a business?
• What type of business are you interested in starting and why?
• What skills do you have in this area?
• What type of work experience do you have in this area?
• In what areas do you need improvement?
• What steps can you take to gain the experience or skills you will need to operate your business successfully?

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