2. Make sure there is a Market for your business

A good idea is not enough for a successful business, the idea has to represent or coincide with an opportunity. Opportunities are market-driven and to shape your idea into an opportunity you have to undertake some market research. Researching your idea is crucial, it helps you assess if the idea has the potential to develop into a sustainable and viable community business. It provides evidence that there is a market for your service or product, and the results of this research will be included in your business plan.

Market Research is the process of collecting information about the market place. This should include information about the size of your market (annual turn over etc) and trends within it, who your customers will be, who your competitors are and what they are doing. You should also look at environmental factors that could influence your market sales e.g. Government legislation, economic downturn etc.

How do I do it?
To conduct effective research it should be well planned – consider in advance:

• What information is required.
• Identify research methods.
• Set a timeframe for the research.
• Establish the research budget.
• Compile and analyse the results.
• Present the results in a plan.

So what information do you need?

The first thing you need to do is to make a list of what information you need to gather and why you need it. For example you will need information about: (Click each button for more information)

How can I find it? - Research Methods

Good research combines primary and secondary research i.e. research you conduct yourself and research conducted by others. Primary Research techniques include:

Research Technique	ADVANTAGES	DISADVANTAGES
Personal Survey	Greater Flexibility Can observe body language High response rate	Time consuming Expensive Respondents have little time to think.
Telephone	Flexible Reach those who won’t give personal interviews	Lack of personal rapport Costly Can give rise to inaccurate responses
Postal	Cost effective Respondents have more time to think Maybe more objective	Low response Limited information obtained Cannot clarify answers

You can obtain market research information from a variety of sources such as direct contact with customers, the competition, the local library reference materials, magazines, a directory of associations, published sales and marketing figures. Try a local college library or business school, vocational or technical institute, chamber of commerce, wholesale or manufacturers sales representatives, trade associations, media representatives (such as advertising space salespersons), or competitors. Additional sources of market information include: regional planning organisations; banks; estate agents, economic development agencies.

The sources you use will be influenced by whether you intend to sell to other businesses or directly to consumers:

Consumer Market Census Mintel reports Key Note reports Socio-economic audits Household expenditure survey Internet

Commercial Market Yellow pages – yell.com Kompass & Kelly’s Directories Databases Trade associations Companies House –Limited Companies

 

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