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“How do you know when you have done
enough research?” It is a question I am asked in nearly every seminar I
give. Research is not a particular popular aspect of starting a business.
The optimists view it as a necessary evil while the pessimists consider it
not applicable and a waste of time. Most attends market research seminars
from a sense of obligation as opposed to enthusiasm.
In fact I am convinced that many of those in
attendance are there strictly to hear me say “great, you have done enough
research, now move on with your venture.” Basically they want to check
"market research" off their to-do list.
While asking the "when is enough" question
seems reasonable it is really akin to asking “When do you know you have done
enough marketing? As a general question it is ludicrous. The most accurate
answer would be “when you decide to shut down you business.” Marketing is
an on-going task that is required for the life of your business in order to
ensure new markets are generated and old markets are expanded.
Research is exactly the same. You can stop
doing research when you retire and sell your company! If you think of
increasing sales as a distant land and marketing as the ship that gets you
there, research is the compass that shows you the fastest way possible.
Now before you groan too loudly about either
the metaphor or the thought of research as never ending, you must first
consider what business research is all about. While useful information
exists on the Internet and in libraries the vast majority of small business
research is conducted by talking to people. Talking to suppliers, your
customers, your colleagues and your competitors. Research is a feature of
your business that should be undertaken on a constant basis. It is really a
frame of mind. By constantly looking for ways to improve your venture you
ensure that research is at the forefront of your business activities.
Of course when most people ask "How much
research is enough?" they are actually asking is “how much time do I need to
spend in the library and on the Internet searching for information, a task I
really do not want to do because it is not my thing, because I’m not very
good at it and I am secretly convinced it is a waste of time and not
applicable to my particular type of business because I know – I just
have a feeling – there is not really anything out there related to my
business, and my business will be a success regardless because I have a
solid hunch.
I bet you didn’t realize it was such a loaded
question! When it comes to research most entrepreneurs carry a lot of
baggage. I wish I could tell you a magic number of hours you have to spend
but there is no such standard. The most important thing to keep in mind is
that you are not alone in your search. Do not stew about how horrible and
unless research is. Instead ask for help!
If you can not talk about your business when
you are only looking for information how will you every be able to talk
about it when you are trying to make a sale. Get in the habit of describing
your venture and explaining its detail. It will help you to build
confidence in yourself and your idea.
Start with the easy resources. Librarians are
not in libraries to enforce silence. They are there to assist people in
accessing their collections whether paper-based or electronic. Many major
libraries actually have a “business desk” where you will find librarians
specifically skilled in accessing business resources. They can often offer
you a plethora of suggestions on where to look for information related to
your specific business. Also do not forget you local business development
centre. Most have a resource centre full of local business specific
resources.
When you are searching online, e-mail or
telephone any organizations or companies that are related to your business
or market and ask for suggestions. Take advantage of other peoples
experience to make the whole research process easier. Do not try to
reinvent the research wheel. If research is not "your thing" then ask for
help! Even if research is the very reason you exists (!) still ask for help
in order to find hitherto unknown sources more quickly.
This whole process lets you build not only a
knowledge network but a marketing network as well. The more people that
know about your business the likelier you will get referrals and/or have a
better understanding of how and where to market.
Of course I have still not answered the basic
question. So here it is: The whole purpose behind research is to position
your business so that you can start generating revenue as quickly and as
effectively as possible. In other words who is your best customer and what
is the best way to reach them.
Once you start your business or launch into a
new market, the primary purpose of research is to avoid being caught off
guard by unexpected circumstances.
Situations and various minor crisis are bound
to turn up whether you are a new or seasoned business. That is what running
a business is all about. What we are referring to here are avoiding
fundamentally flawed business assumptions. The resulting costs associated
with such “surprises” can be devastating.
A couple of years ago Looney Spoons, the
people behind the phenomenally popular recipe book of the same name,
branched into the frozen entrée business and launched "Crazy Plates". The
owners admitted however that their first foray into this new market was
conducted without sufficient research.
Using assumptions based the success of their
recipe book and their own intuition, they created frozen entrees that were
family sized and priced in the $15.00 range. The product was an instant
failure. The problem was that the principle market for frozen entrees is
two person households who prefer a price point below $10.00 and a meal that
can be prepared in less than 15 minutes. The product failed on all counts.
And it was entirely due to a lack of basic market research – who is my best
customer?
The business owners immediately recognized
their error and consequently spent nearly $750,000 of their own money
buying back their product from grocer stores and giving it away free of
charge. They then spent another $1 million on redesigning the package,
reducing the serving size and altering the recipes to allow for faster
cooking times. They made the product appealing to their best customer. It
has been successful ever since.
Most business owners would not have the
resources to fix such a problem. As one of the owners acknowledged "The
lesson here isn't about the success of the relaunch. The real lesson is you
can't replace solid research with pure instinct." With sufficient market
research such situations can be avoided altogether!
When is enough, enough? At a very basic level you have done enough
research when you can describe in detail who your best customer is, exactly
how you are going to reach them and what competing products/services they
already have available to choose from. Your insight must be based on more
than “gut feelings” and “business intuition” and must be based on
information compiled from a variety of sources both primary and secondary.
Only then have you done enough.
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