Research is of paramount importance when it comes to designing and composing a business plan. Using appropriate research methods and tools can help collect relevant data that adds credibility and concrete facts to prove a concept or business model. Without proper research, no business plan will have the impetus to attract investors.
“Going into business without a business plan is like going on a mountain trek without a map or GPS support – you’ll eventually get lost and starve!” – Kevin J. Donaldson
Conducting proper research before starting any business is essential to ensure that the business startup hits the ground running. This also allows for the entrepreneur to be well prepared for any setbacks or obstacles that may arise in the early course of the business life cycle. Determining the type of data needed and assigning a set budget dictates what research methods can be used to represent the market landscape accurately.
Is there a market for the product, and if so, how significant is this market? What type of competition exists? What is the desired target audience for the product or service? What is the average market price that customers are willing to pay for products or services? What is the position of the current market or industry? These are but a few questions that a business plan should answer right away, highlighting the opportunity present and the chances of exponential growth.
Finding the right answers to the questions, as mentioned earlier, takes a lot of research and time. The most appropriate research method to recover data is essential in terms of both saving money and time. This article looks at basic research methods and how they can help in gathering information for business plans.
Quantitative Research
This is a standard research method used by businesses to gather vast amounts of data at a substantially low cost and in rapid time. This research is carried out when a business requires numerical data in the business plan to prove a point or highlight an opportunity. Quantitative research is ideal if the business is looking for specific statistical figures to support analysis or demonstrate a concept. This type of research is carried out in the form of surveys or sample studies tailored explicitly to factor in all measurable variables to get a numeric representation to support the analysis.
Primary Research
This form of research is mainly conducted when the information being sought is not readily available. Examples of primary research include surveys, focus groups, and observations, which are done first hand, eliminating any unwarranted biases or misrepresentation. This is generally a much more time-consuming and expensive way of gathering research data and, by far, one of the most effective and credible.
Qualitative Research
This research method is generally used when a business requires a deeper understanding of a user’s point of view regarding product features, price, and quality. Qualitative research can be conducted through the use of interviews, questionnaires, and focus groups. It is mainly done in instances when detailed information is required that can’t be quantified. Qualitative research is a much more time-consuming process and can also cost a bit more, especially if you have to pay individuals for participating in the study.
Secondary Research
Secondary research is the most common form of research whereby information is already available on a variety of different platforms such as the internet, newspaper, blogs, journals, and books. This form of research is by far the most cost-effective, but it is also the least reliable. This is because third parties often conduct secondary research. Hence, deciphering the source of the information and its relevancy becomes of the utmost importance when trusting data from secondary research.
Conclusion
The researches, as mentioned earlier, help provide relevant and informative data for the development and formulation of business plans. Choosing appropriate research methods helps determine data that can identify the potential of a business and any drawbacks that it may have. Having this information before starting the business can be a considerable advantage for entrepreneurs. Thus, investing the necessary time and money into proper research can be the difference between a successful business plan and a failed one.
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