How to Research a Business Idea

Step-by-Step Guide

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   Step 1: Check out your market.

   You'll need to know what your competition will be and which customers you can sell to.
   
   If the market is already saturated with your type of business and customers are not looking for another option, you may need to pass on your business idea.
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   Step 2: Research every aspect of your business idea.

   You can fully research everything about the product and the business itself by looking through trade publications, searching online, talking to others in the industry, reading the newspaper and contacting your local Chamber of Commerce. , This stands for strengths, weaknesses, opportunities and threats.
   
   Strengths and weaknesses are internal and stem from the company itself (e.g., quality service, a flawed product design) while opportunities and threats are factors related to the external sphere, including the economic climate of the marketplace, your competition and your customers. , This person can tell you the ins and outs of operating this specific business and what it takes to successfully get started.
   
   She can also direct you to franchisees you can shadow or ask questions of and financing companies to use for equipment or startup capital. , If it's a business plan for a small business, you may only need yourself or a few employees, but many businesses will need to hire and train managers as well as have many employees under them.
   
   Again consider your marketplace to determine if you have enough qualified people that you could potentially hire; this is especially true of specialized or highly technical businesses.
   
   Estimate salary and wage costs as well as payroll taxes. , If you're opening a new business, you'll need to have several ideas in case your first choice backfires since you won't have the clout to obtain prime rental space yet.
   
   This will give you an idea about rental costs and lease terms also. , It's common for it to take several years to make back your cash outlay and it can take a decade to pay off a loan if you finance your new business.
   
   You may not be able to take a salary for awhile. , Use the information you gathered from your research.
   
   Talk to your banker or a financing company to see what he looks for in a business plan and get an idea of how financing works.
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   Step 3: Do a SWOT analysis.

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   Step 4: Contact the franchise coordinator for the business you plan to open

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   Step 5: if you plan on opening a chain store.

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   Step 6: Consider staffing issues.

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   Step 7: Look for a few ideal locations that you could set up in.

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   Step 8: Determine your price point and how much volume you will need to do to make up your initial investment and also break even each month.

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   Step 9: Write a full business plan detailing the financials of your idea.

Detailed Guide

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