How to Help Stop Your New Business Failing
19 July 2012
The Government recently announced a £82.5 million start-up loan scheme aimed at giving young entrepreneurs finance and support in a move to boost economic growth. So with this funding now available to assist upwards of 30 thousand new businesses this article looks at why market research is so important for any new start business.
A well known football pundit once said that you cannot get to where you are going until you know where you are. Wise words indeed and perhaps never more appropriate than when it comes to setting up a new business as unless you know the state of the market which you are about to enter, it is almost impossible to know with any certainty whether your new business is likely to be successful or not. In fact, if you do not what is going on around you and where you fit into the equation then the chances of success are likely to be low or at best, diminished significantly. So as a potential owner of a new start business how can you go about finding out the state the market you are looking to enter? Well the first step in making sure you understand what is happening in your industry or market is to carry out some form of market research.
When it comes to research there are a couple of main ways in which you can conduct research and these are to carry out either primary or secondary research. Primary research involves you (or paying someone to do it for you) to collect information or data that has not already been collected. Whilst this method of research is the most expensive and time consuming, it can bring the most accurate results as you can tailor the questions you ask and information you are after to your exact needs.
Examples of primary research you can carry out when deciding whether to set up your own business could include interviewing local people and potential customers for their thoughts, views and expectations when it comes to a locally run business. You could also send out questionnaires in the post, conduct telephone interviews or run online surveys again asking for information and opinion about whether a new business is a viable option.
Another type of research you can carry out is secondary research and this may appeal to you as the data and information already exists. However, you should be careful when relying on secondary data though as by its very nature, it has not been collected with your specific needs in mind. There is also a possibility that the data could be inaccurate, out of date and vague. Sources of secondary data could include trade magazines, websites, local business organisations like your local chamber of commerce and trade associations.
Companies who deal with the sector you are considering setting up in could also provide you with information that could help in your decision whether to set up your own business or not. And on the subject of research, the data and information you collect can really fall into two main categories and they are qualitative data and quantitative data. As their names suggest, qualitative data focuses on peoples’ attitudes and opinions about a particular issue and this could be asking whether they feel there is even a need for a new business in your area.
Quantitative data focuses on collecting data for numerical analysis. This could be finding out how many other businesses there are in your location or the pricing policy adopted by your would be competitors.
Mark Burdett, Sales & Marketing Director of Northern Counties Insurance Brokers, the UK Business Insurance Broker who help many new start-up businesses with their insurance had this to say, “This latest scheme is excellent news for budding entrepreneurs who want to run their own business.
Clearly market research is crucial for anyone looking to start up their own business and whilst secondary research might appeal due to the perceived cost savings, it might not be the best way to establish whether a need exists and whether you have a chance of setting up and running a successful business. Do your research well and providing the results indicate you have a chance of success, your route to running your own business could well be a successful one.”
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