Category Archives: Market Research

Market Research Questions to Ask

As we begin thinking about starting a business, we tend to form opinions about who the customers will be, how much they’ll pay for our goods, and what they like or dislike. But opinions are not necessarily the most solid foundation on which to gamble grandma’s nest egg.

At some point early in the business start-up process you’ll need to venture forth and speak to potential customers. This is the part of the journey where you learn more about who they are, what they need or want and whether or not they will buy from you, once your business is up and running.

Once you have a rough idea of who you’re targeting, it’s time to clarify what you want to learn about them. What would you like to ask or confirm when speaking directly to potential customers? The following questions should help you get started. Feel free to delete any that don’t apply to your business or to add a few of your own.

  1. Who are your customers? How old?
  2. Male or female? Educational background?
  3. Where do they live? Where do they work?
  4. Do they need or already purchase the goods or services you intend to sell?
  5. How much money do they intend to spend on the products or services?
  6. Where do they currently buy the products or services?
  7. What do they like or dislike about the products or services they currently purchase?
  8. Do they think their need for these products and services will be increasing or decreasing in the future?
  9. Will they buy these goods in the next year? How often?
  10. Would they buy this product or service from your business? When?

When surveying potential customers, it’s important to ask only for the information you need and to respect the privacy of all who participate. You might want to test your draft survey on a couple of close friends before taking it to the streets. It’s also important to keep the survey as brief as possible, and to thank those who agree to take part.

If you begin with these basic questions and listen closely to the answers you get, those you’re surveying will guide you to learn much about your business. Their answers will also help you revise some of your questions and even add new ones. It’s perfectly ok to adjust your survey on the fly, adapting to new information as you speak with different people in your market area.

Some entrepreneurs are put off by the task of surveying potential customers. Rather than fearing or delaying market research, view it as an opportunity to learn about the most important component of your future business, your customer.

Rubik’s Cube and Market Research

rubix-cubeA few years ago I received a Rubik’s Cube as a gift, and couldn’t put it down until I learned how to solve it. After the novelty wore off I forgot how until a cube fell into my hands last year and I relearned the solution.

Although I can take a messed up cube and put all the squares back into the right places, I really didn’t’ solve it myself. I simply took the time to learn a few sequences that were developed by others. Yet, to those who don’t know how to solve the cube, it looks almost magical.

What does a Rubik’s Cube have to do with market research? Well, I’ve noticed that during the last couple of sequences of the solution a cube looks wildly messy, like you’ve made it worse rather than better. But if you stick to the plan and follow the procedures, just a few spins later all the coloured squares are back in place – without peeling the coloured stickers off and moving them!

Actually, the Rubik’s Cube and market research have a few similarities:

  1. For the uninitiated, both tasks can seem impossible.
  2. Once you learn the method, what appeared to be impossible becomes achievable.
  3. Until you learn how, you can waste a lot of time spinning in circles and not be any closer to the solution.
  4. The first time is the most difficult. Once you have learned how, it’s easier to repeat.
  5. Those who don’t know how will usually be amazed when someone else does.
  6. The majority of people will never learn to solve the Rubik’s Cube, and most will not take time to learn how to research a business idea.
  7. Rather than learning the processes that make it easy, most people will invest time trying things that don’t work. Fine for playing with a cube, but business opportunities don’t always offer the luxury of enough time to learn by trial and error.

If you’re researching a business idea, there are times when things tend to get real messy. It can be time consuming and stressful – sometimes there is just seems to be too much information, making it difficult to connect the dots. No matter how confusing it gets, the solutions and answers to your questions are usually just around the corner.

The main difference between the Rubik’s Cube and market research is that the latter is useful. Effective market research can lay the groundwork for a lucrative business and even launch you into working at something you love to do. It is your cheapest form of insurance against losing equity you might invest in a business venture. At best, the cube might provide an opportunity to wax philosophical about market research.

Competitive Intelligence Not Espionage

detective

Business start-ups tend to stumble when it comes to gathering information on their competitors. And yet, going into business without having a thumb on the pulse of your industry is a sure way to go broke.

When planning a business, and particularly when it comes to researching competitors, people stress about what’s right or wrong, and often feel they are spying. In business planning workshops, learners ask about the ethics of snooping and whether it’s right to sneak into a competitor’s shop posing as a customer.

Here are a few methods to get you past the initial feelings of espionage and nefariousness, and on to non-intrusive learning about the industry you’re getting into.

1. You can find articles on competitor’s businesses by searching on the Internet. Just plug in your questions and topics and follow your nose.

2. Gather information from competitor’s websites, catalogues and other marketing materials. Whether via the Internet or through offline marketing, your competitors must communicate their offerings to potential customers. And yes, it’s ok to review competitor’s materials; they’ll certainly be pouring over your brochures and flyers once they’re published.

3. You can source information on competitors through Trade Associations and Trade Publications. Just search the Internet for “trade associations” or “trade publications” for your region and your business. In just moments you can narrow your search to a few possibilities for which you can visit websites to learn more. As an association member or publication subscriber, you will be kept up-to-date on industry and business trends and developments.

4. In the process of doing market surveys, you are sure to find yourself interviewing some of your competitor’s customers. A few well-crafted questions will enable you to compare your goods and services with the competition, things such as pricing, packaging, office hours, servicing and guarantees. If you’re uncomfortable doing the surveys yourself, it will cost more, but you can also opt to hire an agency or individual to do them for you.

5. The above methods will fill your folders with heaps of information, but if you do all that and still hunger for more information, there’s nothing wrong with asking a competitor out for a coffee and picking his or her brain yourself. Just be sure to go prepared to share your own information, as the person you’re querying will probably have a few questions to ask of you as well.

In researching your competitors, it’s important to keep in mind that the focus is less about the person, more about the products and services and providing the best deal for your customers.

Just because you’re competing doesn’t mean you are enemies. Most newbies are pleasantly surprised, once they get out and mingle a bit, to learn that their competitors aren’t as scary as imagined. Once you get past the adversarial image, you might find some competitors to be like-minded, interesting people, entrepreneurs just like you. Rather than awakening slumbering trolls, you are far more likely to find yourself learning like crazy, discovering opportunities to collaborate on larger projects, and even making a few friends.

Tips for Naming Your Business

Naming a business can be thrilling and spooky. It’s exciting because naming a business always gives a feeling of getting closer to bringing your fledgling business into the world. But it can also be stressful because the wrong name can cost you.

Today’s environment is such that, even when you do everything right according to the local authorities, you can still be blindsided by a business owner from a far off jurisdiction.

When a local business owner started her housecleaning business a couple of years ago, she did her research, registered her name with the provincial corporate registry, and started building her business. A few months later she was advised by her lawyer that she should stop using her business name because someone else had the trademark pending for all of Canada.

Now, many months later, she has successfully changed her business name, but the cost has been considerable. She has redone her business cards, brochures, vehicle signage, media advertising, and rebuilt her website at naturallyneat.ca.

This situation is not unique. With that in mind, here are a few tips for naming a business.

  1. Search your name ideas using any of the search engines, such as www.google.com or www.bing.com. Too many hits might mean the name is overused. Be sure to try using different search engines, because they don’t all pull up the same information.
  2. Use the built-in search functions at domain registry websites to determine if the domains are available for your preferred business name. A couple of domain search websites are www.godaddy.com and www.hover.com. The search results will tell you whether your name is available in the .com, .net, .org, .biz or .info versions. If your name idea is already taken, some of the registry sites will also list a number of suggestions that are close or related to your name.
  3. Keep the name as brief as possible. Throughout the life of your business, you and others will write, type, think or speak your business name many times. If you wish to inspire others to repeat your business name, make it easy for them to do so. The worst names are those that are difficult to pronounce, or they are so long that you need an acronym to shorten them. Brief is better.
  4. Search copyrights and trademarks to determine if someone has already secured the name. You can either hire a trademark lawyer to do this or you can do it yourself by visiting the appropriate government agency or website. Use a search engine to search using keywords “trademark” and your location (example, “trademark Canada”) to locate the website.
  5. Ask others for feedback on your business name. How does the name fit the business? What do others think of when they hear the name? Does the name sound right for the image you wish to portray?
  6. Once you have chosen your name, register it in the jurisdiction where you intend to operate the business. For example, in British Columbia you will need to register your business with the Corporate Registry.

A great business name will help you avoid costly court disputes or name change exercises, at the same time drawing the right customers to your business. A little due diligence before settling on a business name can save you loads of trouble later. While there are no guarantees, the steps above should help you narrow your focus and choose that magic and hopefully – unique business name.

Are you ready to start your business plan? Get a free business plan template and get started today.

Eight Vital Steps to Proving a Business Case

After a number of years spent assisting start-ups to write business plans, I believe that the point of all early stage market research is to prove or disprove your business case; that’s what the feasibility does, and it’s best done before you go to the trouble of writing a business plan. In doing a feasibility, you will gather enough information to decide whether to proceed or not, while also collecting most of the data you’ll need to write a business plan.

Here are the main elements of proving your business case:

  1. Validate Customers and Demand. Prove that your anticipated customers truly exist, that they want or need your products and services, and that they will pay for them. This can be done through market surveys, interviews, or focus groups. It can also be determined by studying businesses already in the market.
  2. Confirm The Size Of Your Market. Prove there are enough customers to support a thriving business. For consumer businesses, total market numbers can be found through secondary sources, such as census information, surveys and reports—business-to-business research can be accessed from business databases.
  3. Determine If You Qualify. Prove that you have the skills and knowledge to own and operate the business. This is a matter of matching your skill set to that required by the business or industry. In some cases, you may have to upgrade or get certified before starting the business.
  4. Source Your Suppliers. Identify suppliers and communicate with them to verify availability and costs, including shipping and any duties or tariffs that might apply if you’re moving goods across borders.
  5. Validate Pricing. Prove your pricing will work. This will entail getting clear on the cost of producing and getting your products or services into the hands of paying customers, and researching the competitor’s prices.
  6. Build a Financial Forecast. Prove your financial case—that the business will be profitable—monthly for the first year, less detailed for year two and three. At a minimum, you’ll want to create a sales forecast, a cash flow forecast and a 3-year income and expense projection.
  7. Determine Sustainability. Prove your business will survive and thrive. This includes confirmation of each of the six points above, and taking a close look at your personal situation—ensuring that you can manage the business ongoing in terms of your family, time, money, and energy.
  8. Assess Risks. Prove that you can mitigate risks and meet all of the applicable regulatory requirements. This can be done by talking to those already in business, reading trade or industry publications, and getting involved in relevant associations.

Once you’ve gathered the information above, you will be well on the way to proving or disproving your business case. There may still be other hoops to jump through, such as nailing down financing, building partnerships, clarifying investor strategies, and comparing the investment with other opportunities. As to whether or not to start the business, that is a decision that can only be made by the entrepreneur taking the risk. The eight steps above will prepare you to make the right decision for you.

eZine Search Reveals Black Hole

One of the most agravating aspects of the business planning process is the black hole. As I hope we do a lot to eliminate black holes for our customers, I’m always amused when I discover ones I’ve created myself. So here goes…  Last week while coaching a business planning group, Jerry asked the following question “How do I find free ezines to help me self-educate about my business?” I realized then that my simple (I thought) recommendation to “use free ezines to self-educate” was in fact generating one of the dreaded “black holes,” which usually means further explanation needed.

There are millions of ezines available via the Internet today, most of them free. It is easier than most people think to locate ezines. You are just a couple clicks away as you read this blog.

For example, suppose you are starting a dog training business and you wish to become more knowledgeable about the dog training business and the industry.

We suggest beginning your search at http://www.google.ca/ with simple keyword search. For this example, we’ve chosen to use dog training business ezine, but you can apply a similar string of words for your own business or industry category.

For us the top ranking link was to an ezine article at http://ezinearticles.com/?Start-a-Dog-Training-Business&id=2284650 To a probing mind, there’s a great deal to be learned from this page.

• The article itself offers information on starting a dog training business. The article might lead us to a dog training business ezine.

• A glance at the resource box (author’s link at the bottom of the article) tells us the author of the article and links to the authors website. A search of the author’s website might bring other dog training articles or links to ezines. At a minimum, if you happen to be a mom working from home, this link might be useful.

• The article lives at ezinearticles.com which is one of the oldest and most successful ezine websites on the web. Further searches of the EzineArticles website is sure to bring all kinds of dog training articles and links.

• The ads by Google link to several other articles and websites pertaining to the dog training business and industry. These ads are placed by entrepreneurs who are in business and obviously serious about marketing their products and services in the dog training business and industry. Many of them most likely publish ezines for both marketing and customer service purposes. Although the ‘ads’ scenario changes, at this viewing we count 5 ads/links at the top of the page, 8 ads to the right of the article, and another 11 ads in the left side panel.

• Toward the bottom of the page are a number of links to other potential articles – the “Other Related Articles” category appears particularly relevant to the dog training business.

Hitting the back button takes us back to the Google search results, where the first page shows links to Free Dog Training Video Newsletter and Waggin’ Tails Ezine, either one of which might be the publication you need to learn more about your business or industry. At a minimum, they will enable you to peek into your competitor’s world and learn how he or she is doing things.

Another search to try is dog training business newsletter. Search engines have made it easy to find information. You are never more than a few clicks away from whatever information you need to succeed!

Happy learning!