I’ve got an idea for a business; I’ve told my friends and family about it, and most say ‘go for it!’.
But how do I know if there will be enough customers to buy from me, and what competition do I have?
I need to carry out some research before investing my hard earned money into a new business. But where do I start?
I know that it is a good idea to speak to a sample of my target market. This would allow me to test whether the target market is correct. I will also be able to see if my assumptions about what I think they want and why they would buy from me.
Maybe I could by start by speaking directly to a small group of potential customers or carrying out a survey by sending a questionnaire to a sample of my target market? Or I could do this with passersby in a carefully chosen target location frequented by my ideal customers.
I know that a market research questionnaire is useful for information.
I need to know how to estimate levels of demand and opinions on pricing in relation to my idea.
I need to ask the right questions and ensure that it properly completed, so that I can understand all aspects about my business, such as:
• Customer awareness of me, and my business.
• Customer attitudes towards my competitors’ products
• Customer buying behaviour: How and when do they buy (on line or face to face), how often do they buy and how much they spend with my competitors?
There are three main questionnaire techniques:
• Personal survey (that is, face-to-face).
• Telephone questionnaire.
• Postal/e-mail/online questionnaire
Here is some information that I’ve found on Cobweb Info that might help:
If you use an independent market research agency, ensure that they are members of a reputable trade association that has a defined Code of Practice. The Market Research Society provides information on research agencies and consultants in its ‘Research Buyer’s Guide’ (www.rbg.org.uk).
• If you use a postal questionnaire, it is a good idea to give the respondent an incentive to return it – for example, a prize draw or a discount on a purchase. A return rate of 10% of the questionnaires mailed is considered to be a good response.
• It is vital to include a Freepost or stamped return envelope in order to achieve reasonable response rates to postal questionnaires.
• You might wish to conduct a follow-up survey using the same group of respondents, so remember to ask if they are willing to be contacted again and what their preferred mode of
• Be honest. If the results show up something you do not like or had not anticipated, look at this from a positive viewpoint as a foundation for changing your product or market focus.
• There are several online survey tools that are quick and easy to use, such as :
SurveyMonkey.com (www.surveymonkey.com ) and SurveyGizmo.com (www.surveygizmo.com).
So that’s it- that’s what I’ll do. It may take a little time and a little money, but it will help me to know whether my business idea will work, before investing my money.