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Know The Value Of Basic Market Research

May 30, 2008
Many new Internet entrepreneurs make the mistake of skipping the market research phase when building their first venture. In fact, the research phase is the most crucial, and skipping it can result in huge losses.

Why spend the time and energy doing any of this basic research? Because the last thing you want to do is put time and money into an online business presence that nobody cares about.

In fact the worst thing you can do as an online entrepreneur is build a site or product and then go looking for a market to promote to. I've made this mistake before, as have most Internet marketers at one point or another, but the point of this article is to help you avoid the frustration involved with that sort of mistake.

All business ventures start with a simple idea. Maybe there's a specific problem you want to solve, or maybe there's a topic you have a real passion for and you'd like to find a way to earn money within this passion.

Here's a good rule of thumb I got from a Stephen Pierce book:

Cash flows to those who are able to solve people's pressing problems.

You should be aware that one of the best ways to make money is to offer solutions. People are always willing to shell out cash to have their problems solved.

At the same time, I never put effort into a project unless I have a strong interest in the topic. Personally I don't care how hungry a market is, if I don't feel excited about the subject matter I'm probably not going to be able to make money.

You'll have to decide your own position on this - will your primary concern be consumer demand, or do you need to be personally motivated by a topic before you can honestly think about building a business around it?

I recommend an honest balance.

If you are passionate about an idea that nobody else cares about I don't recommend moving forward. If there is an enormous demand for a particular solution but you have no interest at all in the niche I don't recommend moving forward.

Ideally you'll find something you care about, and then determine with a little basic research that a good number of other people also care about this topic, and have the money to purchase quality products within this arena.

And be aware that people spend a lot of money not only on solutions for their problems, but also on entertainment and hobbies. Some marketers will tell you this technically falls under the umbrella of problem solving; this is probably true but I wanted to draw a distinction for purposes of this article.

If you can find a strong consumer interest in a product or service that is strictly entertainment-based you should move forward! The civilized world dumps billions of dollars every year into having fun and enjoying ourselves and wouldn't it be great to cash in on something you really enjoy?

There are a number of keyword research tools and trend watch programs online that will help you find out if a product idea has potential. And of course if you can find plenty of existing action via Google or the search bar at Amazon.com, this indicates a steady existing market.

If you idea has an existing interest, but the Web is not totally saturated with millions of other sites selling products like the one you want to create, you probably have a real winner on your hands.
About the Author
Tim Whiston is a professional entrepreneur who enjoys helping other entrepreneurs achieve success. Learn more about basic market research by visiting his blog, or check out his online course and learn to build your own Website .
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