The way that you conduct your field research will have a significant impact on the quality of the results. Below are the key points to remember when conducting your research and interpreting your results.
Ask The Right Questions
Badly phrased questions produce misleading results. Avoid questions, which encourage the answer "yes" or "no". A stationery shop that asks customers if they intend to buy pens in the next year will find out just that - but they won't discover what type of pens, e.g. specially engraved pens or cheap biros.
Talk to the right people
A survey at a railway station, for example, will get answers from commuters, but if you're targeting people who stay at home with young children, this won't be representative of your market.
You must talk to enough people
A survey, for example, of two people won't get you enough information. Some market research professionals suggest asking at least 150 people in order to get a complete picture.
Keep your research impartial
It's easy to encourage people to give the answer you want. For example: by asking leading questions, or smiling at the 'right' answer. Discussions, where you're not working from a list of set questions, are particularly easy to distort. And in a focus group, individuals with strong opinions may influence the views of others.
Interpret results with care
You need to make sure you draw the right conclusions from your research. Bear in mind that people may distort answers in the hope of affecting what you do. For example, they might say they would be interested in a product "if The price was lower".
Qualitative research - where you're investigating feelings and attitudes - can be particularly difficult to interpret.
It can be tempting to pick out results that confirm what you want to hear, and ignore the rest. But ignoring negative results could damage your business. Be prepared to modify your plans if necessary.
If you don't have the time or skills to carry out research yourself, consider using a market research agency.
Do you know whom you intend selling too?
First you have to think about your intended customers, whether they are a large corporation or stay at home mums. What demographic area do you intend to cover? What type of customers, do you think, will buy your product or service; i.e. age group, profession, income, area, male or female, lifestyle,
You have to cover all these points before you can even think about researching where you chosen market will eventually come from.
Okay so you have decided who you think will be the best market to target and the demographic area they live in.
How do you reach them?
Place yourself in their shoes, where would they shop, what would they read, are they online, have they a website, mobile phone, magazines, local press, charity work, A newer twist is cohort marketing, which studies groups of people who underwent the same experiences during their formative years. This leads them to form a bond and behave differently from people in different cohorts, even when they're similar in age.
For instance, people who were young adults in the 60s have been shown to behave differently from people who came of age during the 70s, even though they're close in age.
Do you know how to build a spreadsheet for the start-up costs for your business?
To begin don’t go overboard on your Start-Up Costs:
When calculating your initial start-up costs, bear in mind that you will most likely need a few months of funding to cover expenses before you even open for business. And remember that it will take a significant amount of time until the business is self-funding so plan for this in your startup cost plan.
If you approach banks and other lenders for money, try to include a substantial reserve for running operations so that you will have enough money to set up an office, take orders, hire employees, and cover other related costs. No one gets it right first time so be reasonable with your revenue assumptions in the early stages and conservative with cost projections. As an added precaution it’s also possible to structure a small-business loan to defer payments during the initial operating period.
Expenses for a business startup are found in six broad categories:
(a) Cost of sales: inventory, equipment, shipping, warehousing, etc
(b) Professional fees: lawyers, trademarks, copyrights, drafting agreements, etc
(c) Technology costs: computer hardware and software, peripherals such as printers and scanners, phones, website development, Internet access, etc
(d) Administrative costs: insurance, supplies, permits, packaging, utilities, etc
(e) Sales and marketing costs: stationary, marketing materials, advertising, PR, trade-shows, etc
(f) Wages and benefits: salaries, taxes, health insurance, workers comp, etc
Do you know how to compute the financial, break-even point, for your business?
Cash inputs and cash outputs
Ideally, during the business cycle, you will have more money flowing in than flowing out. This will allow you to build up cash balances with which to plug cash-flow gaps, seek expansion, and reassure lenders and investors about the health of your business.
You should note that income and expenditure cash flow rarely occur together, with inputs often lagging behind. Your aim must be to speed up the inputs and slow down the outputs.
• Payment for goods or services from your customers.
• Receipt of a bank loan.
• Interest on savings and investments.
• Shareholder investments.
• Increased bank overdrafts or loans.
• Purchase of stock, raw materials, or tools.
• Wages, rents, and daily operating expenses.
• Purchase of fixed assets - PCs, machinery, office furniture, etc.
• Loan repayments.
• Dividend payments.
• Income tax, corporation tax, VAT, and other taxes.
• Reduced overdraft facilities.
Many expenses, such as salaries, loan repayments and tax, have to be made on fixed dates. You must always be in a position to meet these payments in order to avoid large fines or a disgruntled workforce.