Have you done your research? What is important when doing research for start-ups and how should you handle researching as part of starting a new business. In this article we will discuss whether market research is important when starting a new business and what you need to consider.
Typically, start-ups will get very enthusiastic in the beginning and founders are excited to immediately start with their business operations. The reality of business is that the market determines the rules of the game and only a few new companies make it and become sustainable in the long-term. What differentiates successful founder teams from the ones who don’t make their business idea work. There is certainly no single answer for this and factors contribute to the success of your business. Things like the qualities of the founder team and human resources, the product idea, market entry timing, marketing and sales skills and a little bit of luck comes into play. However, there is one factor that can predict success probabilities very well which is market research.
When you have done research beforehand, you have a significantly higher chance of sustaining in the marketplace. With a thorough research you will get an understanding about market trends, competitors and their positioning as well as technological developments and demand characteristics. If you have the best product in the world, you will still fail if you have not found your ideal positioning or if the customers simply don’t demand your product.
Founders usually only think about proper market research when they create a business plan. The aim of the business plan mostly is to get funding and the research is just put into the plan to show your investors a little bit of background statistics and to justify your business decision. In reality, market research should help you as a founder to minimize risk and optimize success rates from the beginning on. There is nothing more valuable than facts and stats that show you how the market situation looks like. You might find out that your product needs to have a different positioning or that you have chosen an unattractive region for your market entry.
Founders tend to worry that they might lose all the enthusiasm when they do the research and that it could stop their ambitions. This is a misconception as businesses never completely stop after the have been presented with the research. Mostly companies just need to make a few adjustments and don’t even have to change the product or service idea.
As we have now covered the fact that research is essential, how can you as a founder do it? Founders typically don’t have a background in research, instead they are experts in their field and about their business idea. Most founders find it stressful to spend time on administrational and non-productive tasks. Furthermore, own research might be biased and does not show the full picture of the market. Therefore, it is best to seek professional market research advice. Circle Research is a leader is B2B market research expert. We cannot recommend the importance of professional market research more for founder teams. It can save you a fortune and turn your idea into a profitable business.
Good luck with your business ambitions!