Q.I have a business idea. Do I need market research?
A.Ideas are great but good businesses are built on finding a niche – and banks will expect to see why your idea is viable. Travers Clarke-Walker, product and marketing director for Barclays Business, says: “doing market research is a good way for a business to show us that it is serious, but it doesn't necessarily need to be professionally produced or an onerous task.”
Entrepreneur Matthew Huggins, owner of Care Matters Partnership, a conference and publications business, celebrates the lack of professional input that goes into start-ups: “Some of the best entrepreneurs haven’t needed the use of expensive marketing research; simply because they either know the market and have spotted a gap or that their idea just wouldn’t have got off the ground had they listened to market research. Entrepreneurs go with gut instinct a lot more than established companies launching new products. The risks are bigger – which is why successful entrepreneurs will cite previous failures – but the rewards for the ideas that work are bigger”. Huggins worked in the conference industry before he launched his business.
Clarke-Walker offers a word of caution, though: “the amount of research a business should do is directly related to their market and the investment required – for example, opening up the only coffee shop in town is relatively straightforward, whereas opening up a new manufacturing plant for a product in a competitive field would probably require something more in-depth and serious.”
Andrew Hawkins, chairman of Comres, a market research provider, acknowledges that for many start-ups market research is more of a “desk job” in the initial stages. However, businesses looking to expand or create accurate estimates for demand should look at professional market research to prevent costly mistakes. Having a third party present your figures will always provide credibility.
Q.How can I do my own research?
A.Clarke-Walker says: “for smaller businesses and start-ups it's far more common for us to see an application where the entrepreneur has done informal and internet research than something professionally commissioned.”
There are plenty of free resources available to would-be entrepreneurs. The British Library’s Business and IP Centre offers free access to support and advice, housing the UK’s most comprehensive collection of business and intellectual property databases and publications. The Institute of Directors and various Chambers of Commerce can also be of assistance.
Q.How do I get the best deal if I get professional help?
A.Hawkins says professional market research need not be that expensive: “one of the best kept secrets of the industry is the omnibus.” It is a sort of group polling, whereby various players in your sector all pitch in for the same information. This can come very cheap.
Hawkins also suggests considering polling just one question. With a little advice from professional pollsters just one question can give you the desired result. This can cost as little as £300.