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Market research is an essential part of any business plan, whether a fledgling business or a multinational organisation. Knowing that there is a sustainable market for your product and understanding what your audience expects from you is vital to a successful business launch. Market research can generally be split into two categories; primary and secondary, and during this article I will explain both and discuss their respective merits and appropriate uses.

Secondary Research

Secondary research makes use of existing data from whatever sources are available. There are government censuses, Mintel surveys, and many private market research agencies that allow access to their data; some of it for free. It can be hugely advantageous, especially as a place to begin. Secondary research more often than not, proves to be a solid base on which to develop your own primary research. It plays the same role as research in general does to your product launch, and should be seen as just as vital. Also, this is of course far cheaper and generally quicker than creating your own research from scratch.

The negatives

The other side of that coin is that you have neither picked the panel to suit your exact needs, nor the questions. It is feasible that you can find some research somewhere that corresponds to what you are trying to achieve but it will almost certainly require some tweaking, and will not necessarily be the people you wish to interrogate; the use of qualitative research designed by someone else will almost certainly make the target specialised away from your goals. Another main issue with secondary research is that by the time it reaches you it’s often outdated; markets change so quickly in business that the only way to be truly current is through new research. This is not to rubbish the quality of secondary research.

Primary Research

Primary research is, essentially, the creation of your own research, whether a question that you ask to your friends and family or a survey put together alongside an agency and administered to a wide panel. Primary research will instantly let you feel more in control of your project; and that is the exact position you will find yourself in. You choose the questions and select your panel through qualitative research, allowing you detailed responses from individuals. You decide how, when and where your research is administered. You can ensure that your research is focussed: the number of participants and their backgrounds, the number and nature of the questions, the amount of time that your survey is available. This is the most accurate way to research a market sector that is specific to you and your product.

The down side

It is of course, more expensive, whether financially or on your time. If performing primary research alone it will take a lot of time, refining and will need some experience in producing quality questionnaires. It will also take time for your questionnaire to be completed if you don’t have direct access to a ready panel. Most of this can be avoided by using an agency, but at a cost higher than performing your research alone.

So what’s the best option?

Neither type of research will take you to your goal alone; however, a combination of the two will give you all the information you need. Using primary research alone, without first seeing what has or has not worked for other companies and possibly missing out on important data from research that you couldn’t afford to perform yourself, is likely to lead to irrelevant questions or missed opportunities. At the same time, relying solely on secondary research is likely to leave you with answers that are vague or inappropriate to your specific audience. The two compliment each other well, and when used in conjunction will give you a well rounded and accurate portrayal of the needs and opinions of your market sector.

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You’re probably reading this blog because you are in the process of starting up a new business or you’ve got a great business idea that you want to develop and launch.

First of all, congratulations! It’s a great feeling when you make that decision to start a new business. And if you’ve never done this before, you’re at the beginning of a very exciting journey.

Now for the bad news. If you’ve just come up with a great idea and are now rushing to get it to market, you’ve probably got a really serious problem. And that problem is that your idea is quite likely to be fundamentally flawed. Or to put it another way, it’s likely to go really badly wrong and it’s probably not going to work.

I know that doesn’t sound very encouraging, but before you rush off into the distance and start investing a lot of time and money into implementing your idea, you need to do something very important indeed…

You need to challenge it.

You need to look at your idea from different perspectives. You need to put yourself in the shoes of potential customers. You need to put on Edward DeBono’s black hat and challenge your idea seriously. While all of this may sound terribly negative and destructive, it’s really important that you take this advice on board. So many businesses are launched with insufficient planning, insufficient testing, not enough feedback from people and poor advice.

If you actively approach your idea from a balanced and objective point of view, where you’ve considered the huge upsides as well as any potential downside which exists, then you’ll be in a much better position to get it right.

Like with anything, starting up a business takes patience and a whole lot of learning. Market conditions change so quickly that you need to always approach you business holistically, and be willing to take advice on board. With those things in mind, it seems like you’re half way there having found this Donut!

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Where do business ideas come from? Did you have a ‘eureka!’ moment while soaping up your ducks in the bath? Maybe you got sick of working for ‘the Man’ and stepped sideways to set up for yourself (much more likely).

On last night’s chain-smoking TV show Mad Men, about a 1950s advertising agency, a young copywriter had a ‘mental block’. She just couldn’t come up with any creative ideas to sell a weight-loss product, so asked a senior copywriter for advice. He said “Think about the problem really hard. Then forget about it entirely. The answer will pop into your head sometime after that.”

Is it the same with business ideas? Few businesses ideas are based on innovations. Why should they be, if there is room in the market for someone to deliver an existing service better? Here’s a tip. If you are thinking of setting up as a plumber, the London boroughs of Kensington, Westminster and Camden have one plumbing business per 6,000 of the population (1/10th the national average). Whereas Norwich has one plumber per 500 people.* Hmmm…

The Springwise newsletter suggests many new business ideas are web-based. Perhaps the most unusual is ExBoyfriendJewelry where unwanted bling can be unloaded. Amazing niche. Now where’s my ball-cock?

* Barclays trade map

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Video is an excellent tool for communicating business ideas online. Even a couple of years ago, streaming video never seemed to work properly. The images were jumpy, the sound muddy, and the video would invariably stick on one frame leaving the ‘talking head’ in an endless, painful rictus.

But YouTube, Dailymotion and other video sharing sites have proved there’s a massive audience for online video that works.

So, I am thinking of including some professional video in a redesign of BHP’s website. We’ve got tons of words about what we do and the clients we have helped, but it’s not always easy to quickly find essential information. Some short video clips may help us communicate our key USPs and services very effectively.

I have previously mentioned the HSBC business advice website which has usefully embedded video. I like the way Salesforce does it, too — yes, it is a man in a suit wandering around in front of a blue screen, but it works for me. Smarta seems have got it right, because it has kept clips short and to the point, which prompts you to try another clip. I’m going to keep an eye on Smarta’s launch in 2008.

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