14 Feb Fine-Tune the Scope of Your Business With Relevant Research
Like a builder with a blueprint, your company’s business plan establishes the foundation for the future of your company and guides all business activities. But just as you wouldn’t expect an architect to draw up plans for a new house without knowing the characteristics of the building site or the owner’s wants and needs, you shouldn’t expect to create a successful business plan without getting the lay of the land through a thorough investigation of your marketplace.
If you are planning to attract outside investors to your company, apply for financing or sell your business at some juncture down the road, you will almost certainly be asked for a professionally developed business plan, including relevant market research. Likewise, potential business partners will expect you to have a well-written business plan. More importantly, the elements of your business plan pave a clear path for future success of your business, day in and day out.
One of the key steps in laying the foundation for your business plan should be to conduct thorough market research. Since your business plan should include statements about the anticipated growth of your company, it’s important you are able to back up such statements with relevant market data. That data will show lenders, potential partners and others that you have a clear understanding of the factors impacting your company’s success.
While you may have formulated the idea for your business because of a personal interest or talent, or to fill a perceived marketplace need, even the best of ideas can’t drive the long-term success of your company on its own. However, if you’ve done a good job of defining your market landscape, thoroughly researching your competitors, and studying trends taking place in your industry, you stand a much better chance of reaching goals.
Research can be conducted in a number of ways, from online searches to review of available reports—and even industry expert interviews. You might begin by looking closely at your competitors. Are there clear patterns of growth and decline over time that seem consistent from one company to the next? Are there seasonal trends worth noting? How does your proposed array of products or services differ from those that are already available from your competitors? What forecasts exist for your industry that support your claims of profit and growth for your company?
New entrepreneurs are often hesitant to embark on the business planning process, sometimes out of a hidden fear that the results will reveal their great idea may not be nearly as unique as first thought. But being uninformed doesn’t change realities of your marketplace. It will, however, keep you from preparing to manage those realities or better position your business in light of competition or other economic factors. Rather than a possible point of derailment, think of the market research necessary for a meaningful business planning process as an opportunity to fine-tune your business in a way that contributes to your chance for success.