Up until now, we searched for ideas that feel right, fit your lifestyle and are doable in the near term. Now, it’s time to do some research to find out if they have earning potential. It’s a vital step, so don’t skip it!
(BTW, I share more tips on Facebook! Follow me here: DORIS Dorota Sierakowska)
Remember: if you start a project that doesn’t make money, it may become an additional source of joy, but not necessarily an additional source of income. We’re searching for an idea that provides you with both. (Sounds great, right?)
So, how do you find this out? If you wanted to do a thorough market analysis, you would have to really dig into the numbers. But, unless you create a massive and cost-consuming project, you can leave that part out and still do basic yet solid research.
Why? Extensive business plans are theoretical and usually become obsolete the moment you make them, while the market validation of a project never lies. Therefore, at this point, focus on answering a few crucial questions that would paint the picture of your potential business. Think about the answers thoroughly for every idea that you chose. The questions are:
Question 1: How much time and money do you need to start?
For example, if you want to write an ebook, your initial investment can be relatively small in terms of money and time (if you already are an expert on something). But if you want to create a fashion brand, the project may become very cost- and time-consuming.
Think about everything that you need to get started. Consider the fact that virtually every business requires at least a simple website. Think about the cost of all the materials (if it isn’t a purely online business). Establish if you need the help of a graphic designer in creating logos, labels, etc. Find out if you need additional education: some books, a specific online course, or any kind of training or consulting.
Costs add up easily. Take your time and really think about it. Put your wishful thinking aside and be painfully honest with yourself.
And, when you finally come up with the results, double them and determine if they are still acceptable. (You may want to take unforeseen circumstances into account.)
Question 2: Who’s your client?
If you want to earn money through your side project, you need to create a product (we will deal with that subject later) that will be useful to a specific group of people. And you need to decide who these people are.
For example, if you make handmade toys and you’re based in the UK, then you’d probably sell your products mostly to British parents of young children. If you create an online course about promoting a brand on Instagram, you may sell it to marketers, entrepreneurs and influencers—no matter what their location is.
- Who are your potential clients? / Who needs precisely what you have?
- Is this group big enough to create significant demand for your product?
- How will you reach those people? / How will you let them know that your business exists and that it offers the product they need?
Question 3: Who’s your competition?
How many people do what you plan to do? With whom would you compete for the attention of your potential clients?
The answer to this question is probably linked to the previous one. If your market is big (therefore, many people may need what you sell), the competition is likely to be more fierce than in the case of functioning within a niche.
But there’s no telling which situation is better. Competing in a big market may be tough, but you may still find many clients because of your individual style, good marketing skills or excellent customer service. When the whole pie is big, you may be satisfied with just a small piece of it.
On the other hand, by creating a niche business, you may establish your position as an expert quickly and find clients almost instantly. At the same time, it’s worth remembering that sometimes the competition is small for a reason. Try to find out if there were similar businesses that struggled and failed because the market was too tiny. And pay great attention to your competitors.
Ok, that’s it!
You just did basic market research.
Make sure that you answered the above questions for each of the business ideas you’re considering.
Now, which idea seems the most convincing? And which idea looks disappointingly unmarketable … so much so that you need to give it up?
Eliminate every idea that would probably lead to a financial fiasco.
STEP 3 completed: You may still have three ideas after STEP 1 and STEP 2, or be left with fewer options. If none of your ideas have the earning potential, go back to STEP 1 and choose some other ideas—and then again follow STEP 2 and STEP 3.
(Having trouble while doing the research? We can do it together! Even one hour of individual consulting may be enough to help you decide which projects are worth pursuing.)