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It can also help persuade others, including banks, to invest in what you are creating. Analyze the potential markets for your business. This needs to be more than mere guesswork and involves doing accurate and intelligent research. How old are your potential customers?
What do they do for a living? Is your product or service attractive to a particular ethnic or economic population? Will only wealthy people be able to afford it? Does your ideal customer live in a certain type of neighborhood or area?
Establish the size of your potential market. It’s important to be as specific as possible in regard to your market and your product. If you want to start a soap business, for example, you may believe that every dirty body needs your product, but you can’t start with the entire world as your initial market. How many children in the United States are currently under the age of eight? How much soap will they use in a month or a year? How many other soap manufacturers already have a share of the market?
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