Market research is described by many as the most important element of setting up a business. That’s quite a claim when few businesses manage to achieve the benefits it should deliver.
When market research is carried out properly you should save time, save costs, and achieve more sales. But if done badly you will just delay starting a business that will be reliant on luck. Sadly most businesses do market research because they have been told to, rather than understanding it helps a business be successful. In not understanding the benefits they do nothing more than waste their time.
Competitors, suppliers, and industry trends are all part of market research but understanding customer demands is where the most significant benefits can be achieved. Nearly every new business sees sales in their first few months much lower than they forecast and that is often a reflection on the quality of their research.
Here are some tips on getting your research right:
If you choose, you can pay for the services of a research company to do the work for you, and certainly they have a valuable role to play, but nothing beats doing the research yourself. We all learn in different ways, but as with any type of studying you will learn and retain more if you read, discover, and complete activity yourself, rather than just reading what someone else tells you. You will therefore gain a better knowledge for you to use yourself in the running of your business. So it makes sense to do it yourself.
Our research said…
Standing on street corners with a clipboard will not be the correct approach for every type of business. Questionnaires can be useful but you have to get the questions and the audience right, and that is very difficult. Analysis of any survey results is equally important and often exaggerated. If 20 out of 50 people surveyed say they would buy a widget does it really mean they will when you go back to them in 2 months time? It is better to base your research on what your target audience has done in the past, rather than what they might do in the future.
Sorry its confidential
It is understandable that we try to protect our ideas as we are very excited about them, but to be a success you do need people to know about the ideas. Yes, there is a risk that someone could copy your idea, but unless it is truly innovative and something you are going to patent then see the bigger picture of success! Tell everyone who will listen what you are going to do – you need to gain interest, get your research done, and build a pipeline of future customers.
You are not your customer
Successful businesses sell what their clients want, when and how they want it, which is not necessarily the same as what you are planning. If you think you are selling the best thing in the world and no-one else agrees, you actually have no business. Good research should help you adapt and change your service so that it is more attractive to customers. Therefore, understanding why customers will probably buy from you as opposed to anyone else is essential.
Don’t rely on family and friends for your research
You bring research into your comfort zone if you ask family and friends what they think, but are they really going to be honest with you even if they say they will? Will they be customers who pay full price? You really can get lulled into a false sense of security if you trust their support.
Look for successful models you can follow
Try and short cut your learning curve by studying successful similar businesses. If you can find one operating in a different area you will often be surprised about how open they will be with sharing their experience and figures if you approach them honestly and ask for help in starting your own enterprise. They will feel proud you have asked them and it will do their ego good. There is also a feeling that running a business yourself is like being in a club together, and we feel a bit better about ourselves if we help someone else.
Don’t stop your research when you start your business. Your competitors won’t stop developing; your customers won’t stop changing their needs and habits. You need to be pro-active not re-active to continue growing and protect your business future.
To summarise, market research done properly can make a huge impact on the success in starting your business. If you think about your objectives and plan what you are going to do in start-up, and beyond, you will be starting a business on a firm footing, supported by realistic expectations.
Written by Andrew Wilson, Head of Enterprise Services