Don’t take a punt with the future of your business
There are many methods people use to choose a horse for the race. Some pick a name they like (how many reds like me lost money betting on ‘You’ll Never Walk Alone’ in 2003?), some will choose a jockey wearing their favourite colours, whilst others will have favourite horses from past years, even if it may have seen better days.
Many Manchester United fans will no doubt have a bet on Alex Ferguson owned horse ‘What a Friend’ this year whilst presumably many Manchester City fans will be having a bet on just about anything else! Of course, if all that fails, there is also the long standing method of sticking a pin on the page and betting on whoever it lands on.However those of us choosing such methods to pick a horse never really expect to win. It's only fun after all. However many of us will take a similar punt when starting up our own business. Instead of a tactic of ‘look before you leap’ we will dive in head first and take a gamble on success or failure, without any of the necessary knowledge that could be the difference between profit and loss.
A new entrepreneur may have lots of knowledge about a particular product or service, but how well do they know their potential customers or the current state of the market they are entering? For example do they know there is a market out there for the product? And if there is who is their likely target market and what is the best way to reach them? It is also useful to find out ideal pricing levels for a product or service and whether this is a sustainable amount for the business. As well as ascertaining the demand for the product, research can also help with the ideal location of a business, how you should be promoting your business and an evaluation of your competitors, including what they are doing well, what they are possibly falling back on and how you can differentiate yourself from them.
All of this information will make sure you are successfully delivering a product or service that the customer wishes to buy and that you are correctly placed within the market to capitalise on this.Just like the best gamblers will try and gather as much information as possible about a race as they can before parting with any cash, so too will the most wise businessmen before making any big decisions on the future of the business.
My father used to warn me of the fact that there is “no such thing as a poor bookmaker”. But far more worrying is the fact that 85% of new businesses are thought to fail within the first five years. Doing as much research as possible before the launch of a new business, or indeed before taking an existing business in a new direction, will increase your chances of being one of the 15% who thrive and prosper.
Now, where is that Racing Post? For more information on new business start up research visit http://www.murrayconsultancy.co.uk/new-business-start-up-research.html