Market Research

Market Research is necessary before starting up your business. Whatever your intended business it is sensible to get as many opinions as possible. Start by talking with friends and family. Bear in mind though that these people will not want to upset you so may not say exactly what they think.

Market Research is necessary to get a full understanding of what your future customers will buy. If you want to know what the demand will be, what price you can ask and therefore what your profit will be then you must ask. Don’t go into business blind. Don’t miss out this information gathering – it could prove costly.

Now write out all the questions you want answers to. Your questions will vary depending on whether you already have a product in mind or are trying to find one. The basic areas of questioning can be summed up as follows:

• Identify your customers

• Discover the customers’ needs

• Pinpoint the competition

• Is there a particular niche you can fill?

Arrange them on a sheet of paper in a sensible order.

I like to have questions which lead to a multiple choice answer. This means that you confine the reply to areas that you want. You don’t have to write long statements. The respondent is happier with a choice rather than having to think. Of course, if you find the occasional person who wants to say more you can write it down. It is after all your survey so you can decide.

However, multiple choice replies do make it easier to analyse each question across the whole range.

Try out your prepared market research questionnaire on a friend to test whether the questions are understandable.

When and where you ask these questions depends on your target customers and how you feel about approaching them.

The two ways I would use are telephone and face to face. I have found that people are quite forthcoming when they are asked for their help.

If your proposed customers are other businesses you can telephone, make an appointment, or turn up on spec.

To investigate businesses look in Yellow Pages to pinpoint the kind you are interested in. You may have to drive round to see if they are the size you want. If your intended customers are out there in the High Street go there with your clipboard and questionnaires. Don’t hang back. People are quite used to being questioned by people with clipboards.

When it comes to people in the street you will need to think out who you are going to approach for your market research. Who is your product/service aimed at? Men/women? Old/young? There are recognised age bands for surveys. And what about class levels? Don’t worry people are used to being asked. Don’t assume anything.

Don’t think about the answers you are being given by individuals. Analyse them when you have completed the full quota.

Get your questions right and the data gathered will help you to decide on details such as price, marketing, design and range.

How many people should you ask? It’s quite surprising – you don’t actually have to ask that many people in order to get a fairly accurate picture.

Don’t forget to say thank you. Perhaps give a small gift or a voucher. I’ve found that good gifts are pens or key-rings with the company name and contact details. Maybe have a prize draw if you are asking people to complete a postal survey.

Market Research is not a one off. Continuous monitoring of the market is essential if you are going to stay viable.

Keep alert. Look through catalogues. Read newspaper business pages. Note advertisements. In other words notice everything going on in the world around you.

Keep your finger on the pulse. Always be on the lookout for threats and opportunities in your sector.

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