Doing research [2006]
- Date : (2006-01-04)
- Author : SAIE
Doing Research - Doing your Homework!
Many people say you must do research before you start a business? But what do they mean? Research sounds like a lofty word for what people do at universities! How does research apply to me and my ideas for a small business? Research is a tool that you can use to increase your knowledge and wisdom. Before you make decisions to take your valuable resources and commit them to a business, you need to have your eyes wide open. You need to make it a priority to know as much as possible about the business so that you do not get caught out in the future. If you are a good researcher, you can make it your goal to know more than anyone else about your business sector so that you know what is happening before anyone else does! Good business research will be very valuable to you when you need to put together a business plan.
Keep it simple!
All research means is to ask questions! The trick is to see if you can ask the right questions and get good information. If you spend most of your research time asking yourself and others, “What are the right questions to ask?” you will go a long way in the right direction. Much research is totally wasted by spending hours and hours chasing after information that will not give any magical right answers.
Check your sources!
Don’t let popular opinion sway you or replace the best kind of questioning that you do yourself. If some friends say that they have heard that such and such a business is a sure way to make a fortune, beware! Never make business decisions based on information “that she said that he said that he heard from his cousin who is in such and such a position”! Always check it out for yourself. As the old saying goes, “If it sounds too good to be true… it probably is!”
Where can I find the best answers?
If you ask yourself this question, this will be the best kind of research! You do not want to waste your time looking at anything but the best answers, so it is worth spending some time and effort on searching out the best answers. Try asking yourself, “Who do I know who knows something about …….?” Then phone them and ask them where they would go looking for the information you are seeking. If you phone two or three people, by the third phone call, you will already know a lot more about answering your question.
What do you need to research?
There are a range of different business aspects that need to be researched, here are some of them:
Customer Research
Here you find out about your customer’s preferences. Some companies spend many thousands or even millions of rands to find out what their customers want. They hire specialist companies who set up a process to ask the customers questions. They may use questionnaires or focus groups (an interview with a group of people together). It can all look very complicated but they do nothing that you can’t do yourself. The best way to do customer research is to talk to your existing customers or the people you are hoping to sell to. All you need to do is to ask them what they like and what they are prepared to pay for your product or service. If you ask good questions, you will get great answers, great information and happy customers because somebody has taken the trouble to ask them what their views are. Everyone likes talking about themselves!
Product Research.
Here you need to find out the details about your product or service. What can or does make you better than other businesses? You need to find out as much information about your product as possible. Suppliers are often eager to help, if you can increase your sales, they will too. Try and find out what others in your line of business are doing, you can even try the internet to see what other businesses like yours, all over the world are doing. Sooner or later you are going to need to see what your competitors are doing.
Researching your Competition.
Anyone who is selling the same or similar products into the same market is your competition! You need to know as much as possible about their business. You need to research them or get others to assist you to find out as much as possible about them. How is their quality compared to yours? How do the prices you charge compare with what they charge? What level of service do they offer to their customers? Is it better or worse than the service you offer? How big is their market share? Is yours bigger or smaller? Is their market share growing or shrinking? How is yours doing? What are they doing to attract customers? Is there anything you can do to make customers want to buy from you?
Market Research
Here you need to find out the size of the market to know if you can reach a part of it. If there is only a market for 100 of a product in a town and there are already three companies chasing after the sales, you probably would be better off finding a new product or moving to a new town where there were no existing suppliers of the product. Many new businesses make the mistake of not looking carefully at the size of the potential market before setting up. Good Market Research will save many headaches later.
Where should you do your research?
There are many sources of information. Here are some suggestions:
1. Libraries Libraries have information on most topics but it is usually not specific enough and may be out of date. If you are needing to find information about how to make beadwork designs that were made in the old days, a library is perfect but if you want to know how many people bought candles last month, a library probably wont be able to help. The library service is practically free. There may be a small membership fee if you want to take books out. Usually you can photocopy the pages you need for a few Rand.
2. The Internet This is a wonderful source of information about almost anything but it can also be frustrating as you can spend hours and hours sifting through information that is not quite what you need. Unless you can find it quickly, find another source. If you do naot have the internet at home or at work you can access it through an internet café who will charge you between R 20 and R 50 for half an hour.
3. Government Departments Trying to find information through Government Departments can be very frustrating, unless you strike it luck and find somebody who knows exactly what you are looking for and can find if for you quickly. Most municipalities have staff who are set aside to assist small businesses. If you can find them, they can be very helpful. There is usually no charge for assistance from Government officials.
4. Market Research Companies You will only approach a market research company if you need to get up to the minute, specific research about your business. They could offer to sell you a special report on your sector or industry that they have put together before. These kind of reports are usually very detailed, but only available to those who pay from two to three thousand Rand up to hundreds of thousand Rands! They could also offer to do research for you (to put into a business plan for example), but this will be expensive.
5. Saving the best to last!
People, live and warm blooded, are always going to be your best research resource. Always try to find an expert to help you. They will often love to tell you what they know. If you can find a tame expert, your problems will be over. Let them tell you where to go, where to look and who to ask. Usually they will charge you nothing, but be sure to show your appreciation. Thank them properly, buy them flowers or buy them lunch!
