Why Validate Demand Before Starting An Online Business
Have you wanted to start your own online business? Or start one even as a side hustle?
Research shows that the number one obstacle most people have is the fear of failure. And that is a very real fear and risk because statistics also show that more than 50% of startups fail just in the first year, if not, in the coming 5 years (Convergehub, 2019)
That is scary enough
That said, what could you do to best prepare for that, before embarking on your endeavor?
Figures also show that the number one reason that startups fail is due to the lack of market demand. Referencing CB Insights (2019), this reason accounts for 42 percent of small businesses which is a pretty serious percentage
Looking at those figures, what then is the one crucial thing you should look at or look for, before you go head on to start a business?
That's right, whether you are finding your niche or if you have a niche in mind or that you're passionate about, make sure you validate its demand
Are there enough people searching for and needing what your niche has to offer? Will there be enough demand for your niche to be profitable?
6 Steps To Validate Market Demand
As an example, if you are using a tool like IdeaBot.ai, it will help you run through 6 steps to validate if a niche or an idea has good or potential market demand.
I have a pet hamster and he loves playing with his toys. Let's take the niche 'hamster toys' as an example.
Here are the 6 Steps...
Step One - Insert Keyword or Niche
Insert the niche keyword 'hamster toys' into the search bar, hit 'Analyze' and watch the tool run the numbers. Wait 10 seconds and voila...all the data you need is laid out in order in one page.
Step Two - SEO Analysis
What does the SEO section show? Data shows high search volume along with consistent monthly search trends. Hence, the search demand for hamster toys is looking good and this niche has got potential. Simply put, there are a ton of people searching for hamster toys online. Hamster toys has got demand.
The right column further validates demand by pulling up the kind of hamster toys people are looking for and most likely wanting to buy. This data for example, will be useful in setting the direction for sourcing our products.
Step 3 - Competition or Competitors' Analysis
Check out the top ten competitors.
Knowing our top ten competitors gives us a head start to getting ahead of our competition and knowing our market’s demands and expectations. Data shows not only there's demand, there's some competition which is a good sign.
Are they primary or secondary competitors? What are their profiles? Links' profiles? Any in the list that we can get ahead of (example the last two on the list)?
From that data, have a further look at the links or sites. Will we be able to get ahead for example, in terms of service, better selection of hamster toys, unique hamster toys , personalized hamster toys, better packaging and more. Knowing our competitors will better prepare us in our marketing efforts, products sourcing, pricing strategies and we know how we can get ahead.
Step 4 - Social Media Profile
We review social media. Are there many people 'talking about' hamster toys? What social platforms do people hang out to chat, share and post about this niche?
For a start, look at the various social platforms like Youtube, Twitter, Reddit, Facebook, Pinterest and Instagram.
Do we see many people searching for hamster toys? Asking others for advice about hamster toys? Reviewing hamster toys? Looking for good hamster toy deals, doing videos about hamsters, doing meet-ups, regularly posting stuff or actively participating in forums?
Looking at the social data analysis, there are lots or 'conversations and activities' with this niche showing there is good demand for this niche product.
Step Five - Ecommerce Platforms
These platforms are for example, Amazon, eBay, Lazada and many more. Hamster toys are in demand as these are on the main ecommerce platforms. The data shows many ratings and reviews as well. This is a good demand sign.
Then we can have a look at the range of products, pricing, positioning, marketing and reviews.
Ratings, reviews and testimonials are some honest feedback that tell us what people or our potential customers are looking for when they buy hamster toys. Will be good to also look at customer reviews as a guide to effectively position our products and marketing for example, our unique selling proposition (USP). We can for example, think of sets or packages or personalized hamster toys.
Step 6 - Putting It All Together
Put all the above together and we can see there's good demand for hamster toys.
Having all that data on hand literally in one click and a little waiting, gives a jumpstart to validating if we should move forward or research another niche or idea.
Knowing there's demand, we can choose to move forward with the niche. Based on all the above data, we can more confidently move ahead with planning and strategizing.
Most importantly and crucially, the niche has been validated and data shows potential demand for hamster toys. IdeaBot.ai covered this ground, giving us a head start foundation in launching this niche product into a business
It saves us months, days and hours of our precious time and effort, that could have potentially gone to waste. Or we go head on falling in love and chasing after a niche or an idea, putting in all the time and effort, to hit a wall at the end of the tunnel.
More Than 8000 Niches In The Bank
By the way, sometimes the tool validates that the niche has poor potential and not worth going ahead with.
Not to worry or fret
This tool includes a directory of more than 8000 niches or ideas that you can research on and run the niches through the validation process. That is a bonus.
If you do already have an idea or niche in mind, yes you can, and it is strongly advised to run the idea or niche through the above validation process.
Otherwise, it is good educational fun to explore IdeaBot.ai and be confident, if you need a good head start and foundation to pursue an idea or niche.