Have you got a brilliant idea for a new business, or a brilliant idea for a new offering for your current business?
While in your excitement you may want to turn your idea into something real as fast as you can, it is important to take the time to make sure your idea really is brilliant.
This means you need to do business research and analysis.
Idea generation is exciting and easy, research and analysis may seem tedious and an activity you may prefer to avoid. But good business decisions are based on good research and research confirms there is actually a market for what you want to sell.
Research and analysis increases your chance of business success, so don’t neglect it. Failing in business can be very expensive and very disheartening.
There are 2 types of research you can do:
- Primary research: This is information you collect yourself e.g. surveys, interviews, observations;
- Secondary research: This is information collected by other individuals or organisations e.g. market reports, government statistics, trade journals.
It is best to use both using both primary and secondary sources of information when you are doing your business research.
“Research is creating new knowledge.” – Neil Armstrong
There are many different areas you can research and you can easily get bogged down in research and analysis, so much so that you never actually progress your idea beyond an idea. First determine exactly what you want to research and give yourself a list of relevant questions you would like answered, and make sure you give yourself a time limit to complete your research to avoid getting into analysis paralysis.
Sometimes you may find from your research that your idea wasn’t so brilliant after all. This is not a bad thing, better to find out now before investing your time and money into something that won’t work. Finding out your idea wasn’t so brilliant also doesn’t mean you should give up on it entirely, maybe from your research and analysis it needs only some tweaks to turn it into something that will bring you success.
Research shouldn’t just be at the early stages of a new business venture. You should continually do your research as part of your general business activities, to validate new ideas and understand and respond to anything in the marketplace that may impact your business.
Here are a few different research activities you can do:
Market analysis helps you understand your potential customers and their needs and the market in general.
Some market analysis questions you can research are:
- What are your target customers demographics e.g. income, education level, sex, age, family life cycle and ethnicity?
- What is the rate of growth in your market?
- Are there any trends or seasonal factors that may impact the market?
Competitor analysis helps you identify what makes your offerings unique and if there are any gaps in the market that your business could fill.
Some competitor analysis questions you can research are:
- Who are you major competitors?
- What value do your competitors provide to customers?
- How is your business different to competitors?
Industry analysis helps you recognise any current or upcoming trends and identify where your business fits into the industry and if there are any opportunities you could benefit from.
Some industry analysis questions you can research are:
- What is the history of the industry?
- What is the estimated size of the industry?
- What are the trends (both past and future) affecting your industry?