It is difficult to know if a new business is going to succeed. But one can often work out that a business is likely to fail.
By working out a marketing strategy, then writing it down as a detailed plan and building a realistic sales forecast based on it, you can establish whether a business idea is viable.
What do your customer profiles look like? Where do these people 'hang out'? How can you get your message in front of them? How can you coax them to take action and find out about what you offer? Then, how can you persuade them to actually try out your product or service? What will your 'conversion rate' be at each stage – one in ten, or one in 10,000?
You may have built a better mousetrap, but how will you sell your first one – and your 10,000th one? Will you be selling face-to-face, of through a distribution channel of some kind (eg shops), or perhaps via a single website?
Will the sales process cost more than the margin that you make, so you end up making a loss instead of a profit? And what does the cashflow look like? Is your marketing plan based on the need to get at least some of the payment up front, to fund the work that you do?
Perhaps most importantly, how can you test the market, before committing to any major expenditure? Be prepared to keep changing your plan as you discover what works and what doesn't.
