Start up Business Series: Market Research
Date: 07/04/19 | Author: Sean Toomer
Market Research has been the reason for many lost hours, lost £’s and lost souls for budding entrepreneurs. It’s a task I believe is almost taken too seriously and has too much importance placed upon it. Make sure you don’t waste your time and, most importantly, budget on it.
I’m not saying it’s pointless; it is most certainly important! But the Market Research phase is where you start to see all these meaningless, corporate-crap buzz-words, like Delivery implementation, in-line management and proposition evaluation. Yeah, that’s helpful to the small business owner.
What even is Market Research?
Let’s start off with the definition of ‘Market Research’; the action or activity of gathering information about consumers' needs and preferences.
And that’s just it; gathering information. It shouldn’t annihilate your startup budget; or even touch it at all if you can help it. We live in the information age where you can get information on almost anything by looking in the right place.
What if we think of the aims of Market Research; or why you’d do it in the first place.
And really there is only one; will it work.
As in, will people buy my stuff and can I sell it to them at a price that’ll make me money.
Before you think I’m just bad-mouthing market research and have an inherent dislike for it, or my second wife ran off with a market researcher, let me say that we’re talking about small businesses here.
The majority of small business owners aren’t looking to shake the entire world, achieve a multi billion pound valuation or be remembered for the next 2 million years. Only to shake their world up a bit.
And by that, I mean, most small business owners will start off with something that already has a market - usually within their field. Like opening their own hair salon, selling eyeglasses online, starting their own design studio.
Of course, these will be done better than they have before, with slight differences, making them stick out from their competition and be remarkable. But, the market is there already.
Market Research will generally reduce your risk. The more research you do in terms of who will buy your stuff, why, how often etc. the less risk you face when you start and hopefully the less problems you’ll face along the way.
But a small business is a different breed, and if there is one thing I can guarantee you as a small business owner is that you will face challenges. It will be tough. It may break you. And in doing so, if you don’t have a healthy appetite for risk; and want to sit at a desk for 400 hours compiling your research before having the balls to dip your toe in the water, you may as well stay in bed.
You might need it later
Market Research is the data gathering stage. Later on during your business planning stage, you might want to reference the research you’ve done here. Such as information on competitors, when determining a selling price, what your start up costs are.
When you’ve started and you’re up and running it may also help solve challenges you face. If a product won’t shift, you can look back at the market research and it might help you figure where you went wrong.
But it might not. And you might be wondering why you wasted all those hours, or worse, the thousands you paid to a research company to produce the flashy document with graphs and pretty colours.
Investors will love it
They’ll lap it up. If your venture is going to involve asking for investment, from either an angel or a bank, they’ll want to see loads of research. And why? They want to make damn sure their money isn’t at risk as far as possible - the more research you have, the more comfortable they’ll feel. Like a mother's soothing words when a child cuts himself.
But that doesn’t necessarily stop the bleeding though does it?
How to even do Market Research
Not a silly question. Do you stand in the middle of a busy high street with a clipboard and ask strangers if they’ll buy your stuff?
This is the one question I find that no-one really wants to answer, and that’ll be because of one of two reasons; they want to charge you for it; or they just plain don’t know.
Some ideas on where to start would include:
- Looking at competitors in a similar field - although, you’ll likely know this anyway
- Analyse Google Trends - are people searching for your product in your area - do they want it?
- Speak to your target audience - the people you want to sell to. This will be the most interesting and useful.
What to do now?
Get some research under your belt and make sure people want to buy your stuff (i.e there’s a market). But don’t waste your life doing it.
Also, look out for our next blog in the series - How to build the right Business Model.
And, if you missed it, our previous blog in the series, Can you handle being a business owner, is here.
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