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Market Research – Why it Matters

Over the past few weeks, having advised readers how important it is for SMEs to have a business plan when launching a business, we’ve given our you the information and advice that you need to enable you to draw up an effective business plan.  We covered how to write a business plan in four different sections:

·         The Project Idea

·         The People

·         The Money

When it came to the article on The Market, it was apparent that some stringent market research is necessary if you’re planning to launch a new business and this is true whether you provide products or services.  Today, we’re going to give you some more information on market research so that you don’t rush in without checking where your idea will fit into the market.

In order to achieve real success, you’ll need to spot a gap in the market that can be exploited with a new product idea or a new service.  Market Research is a systematic review of the area you’re considering and your potential customer base.  Effective market research can make all the difference between launching a successful business and expensive failure leading to debt and insolvency.  Any flaws or problems you find in your overall plan will be much easier (and probably cheaper) to correct at the beginning of the process.

Market research will give you the insights you need to create an effective business strategy and answer questions such as how many staff you’re likely to need to employ, how large your premises will need to be and how much stock you will need when you launch your business.  The more information you have to help you with your business plan, the less likely you are to waste either time or money.

All of the information you gather will also be essential when you need to pitch to prospective investors – the more preparation you do, the more likely it is that investors will consider you as a likely bet. 

Comprehensive market research will also allow you to gain a better understanding of the competition you’re likely to face and this will enable you to make tweaks that enable your business to perform better than other similar businesses. 

There are plenty of government agencies that will give you help and advice if you’re planning to start a business and, depending on the type of business, you may be eligible for grants or loans to help you get started so it’s worth checking out the government website as you’ll also find some information there about the importance of market research when compiling a business plan.

Knowledge really is power when it comes to starting a business and there are so many different ways of carrying out market research to gain this knowledge.  If you’re business is small-ish you’ll be able to collect most of the necessary market data yourself (check out your local high streets, interview potential customers to analyse trends).  Next week we’ll be taking a closer look at how to get the information you need so don’t forget to bookmark this article and check back.  Even better, follow us on Facebook or Twitter and you’ll receive a notification when the next article is published on our website.