Market Research and Its Issues
This article was kindly written for us by Shell LiveWIRE member Laurence Allen of Smart Setting, a tableware hire company based in Wiltshire.
"To many, including myself, market research seemed like one of the easier aspects of running your own business. However, once I started, it revealed a much wider, harder task, that I had clearly underestimated.
Some parts of it are easy, certainly researching competitors was one of the easier tasks (mainly because all the necessary information is on public display) - however there are obvious issues when it comes to forecasting. The whole concept of business and self employment is ‘risk‘, most of the decisions you make will involve it. This is why making any predictions is so difficult. We’re all human and none of us can see into the future, so the best we can do is to make educated guesses as to the outcomes of the future. Some of these will be right, but as past experience shows, sometimes they will be wrong.
How to make the right prediction
If only I could tell you the answer to this (maybe somewhere someone can) but unfortunately no one will always make the right prediction. Nonetheless that doesn’t mean you can never make a right one, or one that is vaguely right. I’d offer the following tips to help;
- Make your market research as extensive as possible (don’t just focus on a small area of your market)
- Don’t just look at primary sources, there are many secondary sources available
- Get together as much information about forecasts as possible (you’ll be asked for figures at many opportunities, so try and make as accurate ones as you can)
- Don’t worry if your predictions are wrong (there are going to be some mistakes / unforeseen changes)
- Learn from your mistakes (they are a useful resource)
I think the most important part from that list would be learning from your mistakes. Certainly when I thought of setting up my company, I believed that market research was only something I did before start up...how wrong I was!
A good example of this would be when I managed to misjudge my market. I own a tableware hire company in sunny Wiltshire and after doing weeks of research I had come to the conclusion that my target audience would be from catering companies (in fact I thought that the ratio between caterers and private hire would be around 80/20).
With this knowledge I contacted at least 30 caterers and waited for bookings to come in. However after a while I began getting calls for private hire, and it wasn't until after my 7th month of trading that I took my first booking from a caterer. This meant that my market research and business plan was in some ways wrong, as the split was probably 80/20 in favour of private hire.
This is where the importance of learning from mistakes comes into place! Rather than dwell on the fact that I had planned it wrong I looked at my results and altered them in accordance to my actual findings. This meant that I changed my marketing plan and started getting in directories and appealing to private hire - something that is so far proving to be fairly successful!
It just goes to show that market research is a continuing process, not only for this reason but many more, including watching out for any new competitors entering the market!"
Smart Setting (www.smartsetting.com)