Tag Archives: Market Research

Market Research, Starting a Business

Rubik’s Cube and Market Research

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rubix-cubeA few years ago I received a Rubik’s Cube as a gift, and couldn’t put it down until I learned how to solve it. After the novelty wore off I forgot how until a cube fell into my hands last year and I relearned the solution.

Although I can take a messed up cube and put all the squares back into the right places, I really didn’t’ solve it myself. I simply took the time to learn a few sequences that were developed by others. Yet, to those who don’t know how to solve the cube, it looks almost magical.

What does a Rubik’s Cube have to do with market research? Well, I’ve noticed that during the last couple of sequences of the solution a cube looks wildly messy, like you’ve made it worse rather than better. But if you stick to the plan and follow the procedures, just a few spins later all the coloured squares are back in place – without peeling the coloured stickers off and moving them!

Actually, the Rubik’s Cube and market research have a few similarities:

  1. For the uninitiated, both tasks can seem impossible.
  2. Once you learn the method, what appeared to be impossible becomes achievable.
  3. Until you learn how, you can waste a lot of time spinning in circles and not be any closer to the solution.
  4. The first time is the most difficult. Once you have learned how, it’s easier to repeat.
  5. Those who don’t know how will usually be amazed when someone else does.
  6. The majority of people will never learn to solve the Rubik’s Cube, and most will not take time to learn how to research a business idea.
  7. Rather than learning the processes that make it easy, most people will invest time trying things that don’t work. Fine for playing with a cube, but business opportunities don’t always offer the luxury of enough time to learn by trial and error.

If you’re researching a business idea, there are times when things tend to get real messy. It can be time consuming and stressful – sometimes there is just seems to be too much information, making it difficult to connect the dots. No matter how confusing it gets, the solutions and answers to your questions are usually just around the corner.

The main difference between the Rubik’s Cube and market research is that the latter is useful. Effective market research can lay the groundwork for a lucrative business and even launch you into working at something you love to do. It is your cheapest form of insurance against losing equity you might invest in a business venture. At best, the cube might provide an opportunity to wax philosophical about market research.

Market Research, Starting a Business

Competitive Intelligence Not Espionage

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detective

Business start-ups tend to stumble when it comes to gathering information on their competitors. And yet, going into business without having a thumb on the pulse of your industry is a sure way to go broke.

When planning a business, and particularly when it comes to researching competitors, people stress about what’s right or wrong, and often feel they are spying. In business planning workshops, learners ask about the ethics of snooping and whether it’s right to sneak into a competitor’s shop posing as a customer.

Here are a few methods to get you past the initial feelings of espionage and nefariousness, and on to non-intrusive learning about the industry you’re getting into.

1. You can find articles on competitor’s businesses by searching on the Internet. Just plug in your questions and topics and follow your nose.

2. Gather information from competitor’s websites, catalogues and other marketing materials. Whether via the Internet or through offline marketing, your competitors must communicate their offerings to potential customers. And yes, it’s ok to review competitor’s materials; they’ll certainly be pouring over your brochures and flyers once they’re published.

3. You can source information on competitors through Trade Associations and Trade Publications. Just search the Internet for “trade associations” or “trade publications” for your region and your business. In just moments you can narrow your search to a few possibilities for which you can visit websites to learn more. As an association member or publication subscriber, you will be kept up-to-date on industry and business trends and developments.

4. In the process of doing market surveys, you are sure to find yourself interviewing some of your competitor’s customers. A few well-crafted questions will enable you to compare your goods and services with the competition, things such as pricing, packaging, office hours, servicing and guarantees. If you’re uncomfortable doing the surveys yourself, it will cost more, but you can also opt to hire an agency or individual to do them for you.

5. The above methods will fill your folders with heaps of information, but if you do all that and still hunger for more information, there’s nothing wrong with asking a competitor out for a coffee and picking his or her brain yourself. Just be sure to go prepared to share your own information, as the person you’re querying will probably have a few questions to ask of you as well.

In researching your competitors, it’s important to keep in mind that the focus is less about the person, more about the products and services and providing the best deal for your customers.

Just because you’re competing doesn’t mean you are enemies. Most newbies are pleasantly surprised, once they get out and mingle a bit, to learn that their competitors aren’t as scary as imagined. Once you get past the adversarial image, you might find some competitors to be like-minded, interesting people, entrepreneurs just like you. Rather than awakening slumbering trolls, you are far more likely to find yourself learning like crazy, discovering opportunities to collaborate on larger projects, and even making a few friends.

Business Planning, Entrepreneurship, Market Research

Eight Vital Steps to Proving a Business Case

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After a number of years spent assisting start-ups to write business plans, I believe that the point of all early stage market research is to prove or disprove your business case; that’s what the feasibility does, and it’s best done before you go to the trouble of writing a business plan. In doing a feasibility, you will gather enough information to decide whether to proceed or not, while also collecting most of the data you’ll need to write a business plan.

Here are the main elements of proving your business case:

  1. Validate Customers and Demand. Prove that your anticipated customers truly exist, that they want or need your products and services, and that they will pay for them. This can be done through market surveys, interviews, or focus groups. It can also be determined by studying businesses already in the market.
  2. Confirm The Size Of Your Market. Prove there are enough customers to support a thriving business. For consumer businesses, total market numbers can be found through secondary sources, such as census information, surveys and reports—business-to-business research can be accessed from business databases.
  3. Determine If You Qualify. Prove that you have the skills and knowledge to own and operate the business. This is a matter of matching your skill set to that required by the business or industry. In some cases, you may have to upgrade or get certified before starting the business.
  4. Source Your Suppliers. Identify suppliers and communicate with them to verify availability and costs, including shipping and any duties or tariffs that might apply if you’re moving goods across borders.
  5. Validate Pricing. Prove your pricing will work. This will entail getting clear on the cost of producing and getting your products or services into the hands of paying customers, and researching the competitor’s prices.
  6. Build a Financial Forecast. Prove your financial case—that the business will be profitable—monthly for the first year, less detailed for year two and three. At a minimum, you’ll want to create a sales forecast, a cash flow forecast and a 3-year income and expense projection.
  7. Determine Sustainability. Prove your business will survive and thrive. This includes confirmation of each of the six points above, and taking a close look at your personal situation—ensuring that you can manage the business ongoing in terms of your family, time, money, and energy.
  8. Assess Risks. Prove that you can mitigate risks and meet all of the applicable regulatory requirements. This can be done by talking to those already in business, reading trade or industry publications, and getting involved in relevant associations.

Once you’ve gathered the information above, you will be well on the way to proving or disproving your business case. There may still be other hoops to jump through, such as nailing down financing, building partnerships, clarifying investor strategies, and comparing the investment with other opportunities. As to whether or not to start the business, that is a decision that can only be made by the entrepreneur taking the risk. The eight steps above will prepare you to make the right decision for you.