EVERYONE tells you to do market research before you start a business, but the
idea of doing extensive research can be just as daunting as the start-up
itself.
So how do you go about it? Where do you start? And what can you hope to find
out?
The first place to go is your local library. If you are able to get to London,
the newly opened Business and Intellectual
Property Centre (BIPC) at the British Library has huge resources
available for people looking to set up their own business. And, best of all,
it is free.
The information on hand includes 7,000 printed market-research reports, by the
likes of Mintel and Frost & Sullivan, covering every kind of market you
can think of, and giving details on the major players, the size of their
market share, the sector’s potential for growth and so on.
If you do not know what you are looking for or where to start, the library
staff can point you in the right direction. You can also book a free
30-minute advice session with a member of staff to go through in detail what
you need and how to get the most out of it.
The BIPC also provides free access to other resources that would normally be
available only for an expensive subscription. They include eMarketer, which
provides international market research on online businesses; Euromonitor,
which has access to 4,500 country and industry lifestyle reports; and Key
Note, which has more than 2,000 reports covering 30 industry sectors.
There are brokers’ reports, which provide an in-depth assessment of markets,
trade journals and business media, and you will have access to the Complete
Business Reference Adviser (Cobra), an online database of practical
information about all aspects of starting, running and managing a small
business.
The centre runs weekly workshops that are either free or heavily subsidised.
Workshops taking place later this month include the topics “Researching a
company” and “A beginner’s guide to intellectual property”.
The BIPC also organises regular guest talks at the centre – recent events
featured Sir Stelios Haji-Ioannou, the founder of Easyjet, and Dame Anita
Rod-dick, the Body Shop founder.
Ben Sanderson, a spokesman for the British Library, said: “Primary research
can be very expensive and time-consuming so, if you consult some secondary
research first, you can develop a good understanding of the market and your
customers and competitors. It is putting you in the best position before you
spend any money. Since we opened we have had 25,000 people through the door.
There are a lot of people who come in every day for several weeks when they
are setting up a business.”
If you are unable to get to London, other libraries with good business
resource centres include Norfolk and Norwich Millennium Library, Birmingham
Central Library, Manchester Central Library, Scotbis at the National Library
of Scotland in Edinburgh, Leeds Central Library, Belfast Central Library and
Businesseye.org.uk, which has several business resource centres in Wales.
You can also do a lot of market research online, from finding out about
seasonal trends and demo-graphics in your market, to researching your
rivals. Google Trends (google.co.uk/trends) can tell you at what time of
year there is the biggest demand for your product. If you are thinking of
starting a business selling lawnmowers, for example, it will show that last
year there were three distinct spikes of demand, in April, May and August.
Microsoft is testing a new product that
can give you a free breakdown by age and gender of who is searching for a
particular product. Go there and click on the “Intelligence” link. It will
tell you, for example, that 78% of people searching for “garden shrubs” are
female, a statistic that could be helpful in creating your business plan.
If you click
here it will tell you how many times a month people have searched for a
particular word on Yahoo, the search engine. There is no home page, just the
tool, but it is a great rough-and-ready guide to how many people were
searching for your product over a particular period. In January, for
example, 58,444 people searched for lawnmowers but only 973 searched for
garden shrubs.
Researching your competitors online is also easy. Simply use a search engine
to look for firms already doing what you want to do. Remember to search as
if you were a customer. For example, search for “drain unblocking” rather
than “high-pressure jetting” because customers tend to use descriptive terms
rather than industry jargon.
If you are entering an established market, there should be plenty of existing
businesses with websites to mine for information. You can find out how they
describe what they do, how they package their services and the prices they
charge.
Will Critchlow, a director of Distilled, an agency that helps companies appear
in search engines and advertise online, said: “The internet has opened up
amazing opportunities for small firms to get access to data and carry out
market research that they simply would have not been able to do a few years
ago.
“And, as much of it is free, it means that small start-up businesses have as
much of a chance as bigger competitors of finding the information they need.”
Fiona Davies, membership services manager for Women in Rural Enterprise
(Wire), a networking group with 2,500 members, said research should not stop
once the product has been launched. “The best people to ask about your
product are the people who have already bought from you because they are 50%
more likely to buy from you again. So keep asking them questions – if it is
underwear, for example, ask them what they think about a nude colour for
summer, or do they like plastic straps? Not only is that engaging them, it
is also telling you what they want. The minute you decide that you know what
your customers want and ignore what they are telling you, you are lost.”
She also advises becoming a customer of your competitors so you can keep an
eye on what they are doing: “The first thing Wire ever did was sign up for
another network.”
Judith Hunt and Steve Connelly launched their online trade exchange for
businesses, Bizunlimited, (bizunlimited.co.uk
) in February after studying their idea for three years.
Their research included using the free facilities at City Business Library to
look at competitors’ annual reports, find out about other barter systems
around the world and create mailing lists of potential customers.
Hunt also quizzed the firms that joined Bizunlimited about how the service
compared with that of its competitors.
Hunt said: “A lot of research is time and energy, so the costs are fairly low.
The trick is finding out where to go for the information.”
As part of their research, Hunt and Connelly took a stand at an exhibition and
asked everyone who passed to fill in a questionnaire about the service they
were planning to launch, offering them the chance to win an iPod as an
incentive to complete it. Then they e-mailed everyone who had visited the
show and asked them too.
She said the negative feed-back was just as useful as the positive responses:
“Some people were cynical about our service and so we were able to log a
whole bank of objections to what we are doing. Then we wrote a list of 40
points of resistance and used them for our telephone scripts, in news
releases and on our website.”
Another useful place to start is Business Link, (www.businesslink.gov.uk
) the government-sup-ported advice organisation for small firms.
Its information service can tell you what research is available and how to get
it. If you need to commission market research, then Business Link advisers
can help you draw up a brief and find a market researcher to do the work.
Roger Hetherington, local adviser manager for Business Link East, said:
“Market research is vitally important. You may come up with an idea that you
think is a sure-fire winner but you need to have people to test it against.
Your friends and family are a start, but that is not sufficient research.
Talk to as many people as you can who you trust to give you an honest
opinion. You have to be very careful that you are not kidding yourself.”
