What Is the Demand for What You Have to Offer?
When you’re considering a new startup, supply and demand considerations exist. Let’s go over a few of them.
The Demand For Your Products and Services:
If you are trying to sell a product or service that nobody wants, you’ll struggle to make sales. Your business will fail unless you try a different approach. It’s hard enough getting into the market as a newcomer.
You want to make sure you’re offering products and services people want. When you do, people will come to you for their needs. You have something they want, and selling just became much easier than trying to sell them something they don’t want.
Selling a New Concept:
If you’re trying to sell a new concept, then people may not even know if they want the product or service because it’s new. Trying to sell a new concept takes strategy and patience. It may be something that catches on and takes off in the market, or it could take years to gain traction in the marketplace.
In an established business introducing a new concept is easier than introducing something new while trying to make a business from that idea. An established business already has income and can depend on profits while promoting new concepts to its customers.
Demand In An Area:
When considering a location to open your business, you’ll need to look at the supply and demand for your product and service before opening in that area.
If there are no other businesses in the area, then find out why?
For example, you’re planning on opening a computer store in a small town. The population is around 1,500 people, with the majority of them in their retirement years. You probably won’t see much business with this scenario because many people don’t need what you have to offer.
Opening in an area where people want what you have to offer is what you’ll need to do.
Another point of view when it comes to no demand in the area is, that you may be the first to bring this idea to the area. If you find potential, it could be your lucky day because you have found an untapped market.
In either case, do some market research to identify the demand before you open your doors. Market research is a safe way of doing it.
Market Saturation In An Area:
Plan to locate your business in an area where the market is saturated. You may not be able to compete with established businesses. Often, when many companies are competing for the same customers, a price war will occur.
With many players involved, the price cuts can be so deep that there isn’t enough profit left to make ends meet. Starting a business In this situation may not be worth it, and you won’t have enough profit to keep your doors open.
Another approach is to bring something new to the market that the competition isn’t providing or improve on something that the competition is performing poorly, that you can improve on.
Keep in mind, that your competition may copy your idea before you open your new business. It would be best if you had an idea that can’t be easily copied, or you could be wasting your time.
For more on Supply and demand have a look at the resources below for a broader overview.