Whether a new or existing business, a foundational element to any business’ success is the initial and ongoing research; more important is conducting the right type of research. To research means to search for knowledge or to establish facts. Business research could therefore be defined as essentially gaining the required business knowledge and facts for the purpose of developing your business and giving you an edge against your competitors.
Speaking with many ‘entrepreneurs’ or business owners, it is not surprising to hear some of them disregard the idea of undertaking any form of research. Some feel it is irrelevant? However, please answer these questions; without undertaking research, how do you know what exactly your customers want? How do you know what your competitors are doing, and then compete strategically? How do you identify what is happening in the market and industry to ensure your products or services are relevant?
Taking a closer look at some of the entrepreneurs or business owners who refuted undertaking any form of research, they definitely undertook some form of research. They asked people about the feasibility of their business idea, they looked at businesses in the area that were supplying similar types of products or services, and they considered who their possible customers would be? All these constitute research.
Also, if you ask some people who have failed businesses possible reasons behind the failure, you may note that some of the contributing factors could have been eliminated had they undertaken some research, and had more knowledge about their customers, market or competitors.
Whether starting a business or looking to grow your business, I want to challenge you to always undertake a structured (formal) form of research in order to maximize the potential Return on Investments (ROI).
We could explore research from two angles; research for new businesses, and research for existing businesses looking to grow and expand.
Please indulge me as I use the following analogy from the bible; when God was giving the children of Israel the land of Canaan, he asked Moses to send out men to spy out the land… whether the people who dwelt in it were strong or weak, whether the land was good or bad, rich or poor etc.
Same principle applies to when you receive the insight to a great business idea, you need to research; research yourself, research your potential business partner, research the market you plan on entering and research the types of finances available to you. By researching yourself, you can establish whether or not you have the skills and experience required to start and run your own business successfully and the skill gaps that exist for you to fill. By researching your potential partner, you find out the skills and experience they will be bringing to the business, how it complements your skills and most importantly whether you can work together.
Your market research, sometimes referred to as industry research is one of the most important and not to be compromised research you need to carry out. Omitting to carry out this research, even if it is only preliminary to start with, could lead to dire consequences. You could find yourself in a market that is dead to its bones or you could find a market buoyant beyond your expectations. In carrying out market research you are able to establish market growth potentials, trends or climate, receptiveness of the market and who the market players are such as suppliers and competitors.
While for Existing businesses, your concerns would usually be about growing the business and increasing profits, serving the needs of customers, being ahead of competitors, keeping abreast of the evolving economy and environment, and taking advantage of emerging technologies. To do all of this successfully is only possible with the use of research. Research in this area would include; same research as mentioned above, competitor analysis, customer surveys, employee surveys and many more.
Knowledge of what your competitors are doing can be vital information to enable you develop your competitive advantage (or even your unique selling proposition). Remember that if potential customers are not buying from you, they are buying from your competitors. With competitor analysis you are able to identify who your competitors are; their products/services, pricing, distribution etc. Armed with some of this information you are able to make better business decisions, and strategically position yourself against your competitors.
Customer surveys will enable you gather information about the needs and opinions of your customers. Customers’ needs are constantly changing, therefore businesses need to be keep abreast of these changes and trends in order develop their products and/or services to be relevant to the market they are serving.
Generally, carrying out the required research can be quite easy one hand, while on the other hand, it can be very time-consuming and intricate, it all depends on the type of research required and the market you are in or looking to enter. If you are finding it difficult to undertake the research yourself, or do not have the time, it might be worth your while outsourcing the research to an organization who provides such services.
Once you have the market research completed, you are now in a better position to know if and how to proceed; you have an understanding of the market you operate within, know what your customers want, in a position to develop a competitive advantage, and better informed to make decisions about the strategic development of your business.