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(Article first published in Nov '09. It has been modified slightly to suit its publication on our site)
If you are thinking of starting a business or a new service within an existing business, it is extremely easy to get carried away in the moment. Everyone knows that you start with a business plan, but that might just be your first and quite fatal mistake. As you write your plan a strange thing happens; you start to believe your own hype! It is easily done, everything sounds so plausible and the numbers you include in your forecasts and projections seem easily done.
Of course we also know that research is a big part of writing a business plan, but few people at this stage truly
"listen" to what the research tells them. They want the answers to be what they want to hear and that's a very dangerous thing. Before they know it they have spent tens of thousands on a business that never had a chance!
The answer to this dilemma is four-fold:
Firstly, you need to gather as much information as possible. Look at every possible angle, from target market to price points, competition and need. Also use tools like Google to find relevant and more quantifiable data. There is a mountain of available data with more added every day. For instance, the Google Alert tool (www.google.com/alerts) allows you to track any subjects you wish and receive a daily email any time that subject is mentioned online. In just a few days you can gather some amazing data points completely free.
Secondly, don't dismiss any data that contradicts your belief in this new venture. For example, if there are no competitors, does that mean that:
a) Nobody has had this epiphany and you are the smartest person on the planet
b) There are no competitors because nobody wants the product or service
It could be either, so be open to ALL possibilities. Use the negative data as a platform to ask real potential customers the really hard questions that will determine the real potential of your product/service.
Thirdly, take all positive data with a pinch of salt. Be your own hardest critic and don't accept data at face value. The only way to prove positive data is to test it in a real-life environment. For example, potential customers might say they would buy your new product, but how many will actually put their hand in their pocket and actually buy it? Until you have tried to sell a small quantity you might never really know.
Finally, TAKE YOUR TIME! Don't rush this process, it takes time to cover your bases, but you will literally pay the price if you rush ahead.
In summary, you may find that the data dissuades you from going beyond business plan stage, but don't see that as a failure - you just saved yourself a ton of money and heartache!
Franco De Bonis has worked in the field of sales and marketing promotion since 1990 and was most recently the global marketing manager for a major international technology company before setting up The DG Group in January 2007.
The DG Group is dedicated to delivering all the marketing solutions any company may require. Whether it's a website or leaflets and brochures, or even some product packaging; The DG Group will manage the whole project and even provide guidance along the way.
The content in this section is the original creation of The DG Group and is protected by copyright. You may use this content on your site or in other materials providing you acknowledge The DG Group as the author and include a link to our site.
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