Conducting market research

May 22, 2009

According to academics there are primary, secondary and tertiary sources of market research. But we don’t have time for all that, do we? At the heart of every business plan is hard facts or estimates based on the best facts available. Without this all of your projections and assumptions are useless. Many people ask how financial projections can be made in any accurate fashion. The answer is to base as many figures on best information available and make realistic estimates on the rest. Here are some ideas aimed at getting these facts and figures.

• Start by examining your competitors. Who are they and what market segments do they serve? Are there seasonal factors affecting your markets? Do you know anybody who has worked for one of the competitors and will talk to you? Find out as much as you can about your business competitors.
• On general market size there is the Central Statistics Office. The CSO keep a wide range of statistics on markets, imports, exports. So this will help you assess what market share you need or whether your sales projections are realistic. However, be careful about using gross statistical data. The information you are looking for may not be in one data set and you may have to gather information from different data sets. An example being the person who once tried to convince me that there was nobody making hand-made curtains in Ireland, as the Irish CSO didn’t have anybody recorded under this heading. Remember, many hand-made curtain makers see themselves as interior designers or under some other label. Make sure you get all the relevant information together before making any conclusions.
• Trade magazines are a good source of information. Successful companies are only too happy to brag and if you don’t want to spend all that money on expensive magazines, your local public library holds a wide business reference section for you to read. Trade magazines are also useful for identifying trends in your industry.
• Newspapers are a good reference source. Each week the business and jobs supplements give comprehensive coverage to business. Again back editions are kept in the public Library.
• If there are similar businesses that are not in direct competition to you they may well be willing to give you information. They may be willing to give estimates of running costs and seasonality information. They may also give you leads and ideas that you may not have considered.
• Wholesalers and suppliers will also be able to give you credible information. If they are supplying to you then they have an interest in giving you accurate information and making you succeed. In particular, they may be able to give information on the business cycle for the sector you are intending to enter.
• Many large companies and bodies issue annual reports and accounts and may even give breakdowns by region or market sector. Again these are ways to verify market size, sales projections but also product mark ups and margins.
• Hard neck is also a useful market research tool. If you ask people for information they can either give it or not. You may be surprised by the number of times people give information without thinking about it.

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