Starting A Business: The Importance Of Market Research
Do your market research before you start ...
If you're thinking of starting a business, then you may already have a great idea. However, just running it past your friends and family is only going to get you positive remarks. Like Xero say, you need to do your marketing research ...
When you're starting a business, doing your market research is vital!
copyright: varijanta / 123rf stock photo (licensee)
Market research should be an inherent part of your business, but it's even more important to conduct it before you even start. What if your idea is already a business? Are you going to be able to compete with existing players? Or even, could your idea infringe on someone else's intellectual property?
It's important to know who's doing what already, just as much as it's important to know who's going to buy from you and just how big the market for your products or services is. Market research will even tell you where your customers hang out, be that in physical spaces or online via sites like Facebook, Twitter, LinkedIn or even Instagram.
During your research, ask yourself non-financial questions such as:
Who will purchase from you?
How are you going to communicate your offering to your target market?
How is your target market going to purchase from you?
Will your product or service be out of fashion or overtaken by technological advances before you even have the chance to bring it to market?
Will you be able to source the appropriate level of working capital?
Remember, failure to do your market research will inevitably increase the chances of failure of the business. We can all read horrifying statistics like those quoted recently in the Daily Telegraph that 50% of start-ups in the UK fail within five years.
"So market research should be part of your business strategy from before day one!"
Xero has put together a series of videos that I know you're going to find useful, and so this week, I thought I'd include their first video, which is surprisingly about market research and the inspiration behind this week's blog post.
A potential client contacted me a few weeks ago and asked if I would meet up for a coffee to hear about her business idea. She was full of enthusiasm and I could instantly tell she would put more than 100% into making her business successful.
However, as she said she needed the guidance and wisdom of someone who had lived through a similar experience. The idea was great but was it feasible? her idea may be great to her as she but would others view it in the same way. I advised her that one of the first tasks is to undertake market research.
"Would you like to know more?"
We work with many new start-ups and I always recommend that they watch videos such as this one from Xero, one of the great cloud-based accounting packages suitable for start-ups.
But if you've done your research and want to take your business further, call us on 0333 335 0453 or click here to ping over an email and let's see how we can help you get started.
Until next time ...
If you are not thinking of launching a new business today then I ask you to consider entering the £50 challenge that is being run by Essendon’s nominated charity for the year Medical Detection Dogs? This fabulous charity is 10 years old this year and the dogs they train and love are saving lives every day.
All you have to do is enter a team of 2 or more, invest £50 in a venture and turn it into as much as you can within 50 days.
I will even refund the £50 to the team that comes up with the best idea. It could be as simple as buying £50 worth of ingredients and baking cakes to sell, or buying items at a charity shop and reselling them.
Get thinking and let me know your ideas by 10th March so we can all help those woofers have fun helping us humans.
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves ‘getting his hands dirty’, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.