Know your industry:
One of the biggest mistakes start ups make is not doing their research or ignoring red flags in the market. Do your homework and research your industry; be sure to include the following key items:
1) Has there been any recent growth in the market? If so, why? Is this growth on the rise, or has it peaked and is about to decline?
2) Have consumer tastes changed relative to your product or service? Has there been a recent shift in the way people live that has created a need for your business?
3) Have consumer sentiments or perceptions about your particular product or service changed?
Know how to identify a trend or opportunity:
Have there been any recent trends or developments that make entering the marketplace ideal (or not ideal)? Take a look at any opportunities created by consumers as well. For example, the “green” trend. As a retailer, offering these “green” products to your customers may enhance or distinguish your position in the market?
Know your competition:
When trying to figure out who your competitors are, don’t just go for the obvious. If you want to open a candy store your competition is anyone who takes money from a consumer hoping to satisfy a sweet tooth, not just other candy stores. Once you start thinking in these terms, your potential consumer population will grow.
Know your place:
Where do you belong? Start thinking about what it is that you are offering. Is it unique? Does it fill or create a need that is not currently being met in the marketplace? Are consumers happy with what the competition is offering and how they are offering it?
Know your audience:
The goal here is to separate the group most likely to be interested in your product or service from the entire group of people who might be interested in your product. Once you know exactly who you are selling to, you can more efficiently allocate your resources, whether it’s time or money.