“In God we trust, all others must bring data.” William Edwards Demming
Entrepreneurs are big idea people. They can see a world that just works better. The trouble is that many of their big ideas don’t work out. In fact, only about half of all new businesses survive five years or more. One way to mitigate your risk of failure is to conduct quality market research prior to launching your business.
The term “market research” tends to be thrown around, but there is a big difference between thoroughly conducted, comprehensive research, and simply checking in with few friends and acquaintances to vet your idea. Good research includes primary and secondary sources, a deep analysis of competitors in the space, demand assessment, a breakdown of the economic viability of cost models and any market risks. Truly understanding these areas allow you to develop market segmentation and product differentiation.
This kind of research isn’t something that you can get from a Google search or even Google Scholar. The SBA (Small Business Administration) offers some resources like SCORE, which can match you with a mentor to help guide you through the process. Independently obtaining commercial research can be very expensive. Gartner and Forrester reports cost $15,000 or more and other, less prominent firms charge $1,500 or more per report.
You might wonder how research can be so expensive. Well conducted research takes time and thoughtful analysis from experts. While it may be tempting to skip market research, the reality is that this information is the foundation of your business plan and skipping this step can cost you exponentially in the long run. Without market research, you are blindly trying to identify your target market and guessing at attainable revenue goals.
One option is to work with a professional business planner. A good business planner will include market research and financial modeling in your overall business plan. When you work with a business planner like Sage Consulting, we listen to your ideas and then dig into the data to help you find your best buyers or tweak your business model for success. Starting out with a solid business plan will save you years of frustration and help you drive profitability from day one. Let’s get you on the right track with your business plan. Reach out to us here to start building your research foundation today