The costs of fuzzy(!) market research ~ Sounds + Food 'n' Retail

The costs of fuzzy(!) market research

Fuzzy market research is what I call the pre-quantitative research you would do for writing a business-plan. It's when you're still trying to form a picture of the industry, your business, and your role in the whole thing. And finding that out costs both time and money. How much can certainly differ per business and per industry.


In the case of FnR, you'll be looking at several costs at the initial stage. For one, it is a physical business, meaning that you'll likely be looking at geographical locations, inside and out. That brings with it travel-costs and costs of using the services in the area you are checking out. The latter is important, as you want to form an image of what a customer would feel like both in your venue and that of your competitors. 

It is also a people-intensive business, which brings with it particular dynamics of interaction that must be understood, in the sense of how you want to run your business, and how you want your employees to represent you in front of your visitors. Costs here include the time and money spent studying materials, as well as costs involved in meeting insiders, possibly at trade-shows, workshops, or just informally. You can offset some of those by being creative and combining it with travelling to physical locations, which you also want to study. 

It's also worth studying the industry that you're operating in, which has it's particular quirks and characteristics. You'll have to find financing, and there are different investors in the FnR-world than in other businesses. When running, you'll have to interact with a variety of suppliers, and it helps to be prepared for that. Again, these involve costs and time spent on relevant materials, as well as talking to insiders, some of which can be combined with the above. 

Finally, you'll have to prepare a business-plan, which will take time. Included in that is the time spent writing it, but the most money and time will be spent on market-research. That includes some way of understanding what demographics will be visiting your venue, the costs of running at a certain location, and other variables important to running your business.

Fuzzy research methods
Luckily, the most effective research method also happens to be the most profitable one: gaining experience. By getting a job or jobs in the industry, you'll not only get to speak to insiders, but you'll learn to focus on the stuff that really matters, will produce a better business-plan, and gain more trust from investors, who value experience as much, or more than a good business-idea. And you get paid for doing it, how crazy is that? ;)

The second most effective research method is also quite cheap, the online-search and running this weblog. Not only is there a huge variety of free literature and media, like podcasts and videos, but, hopefully, as I record this here, smart people give me feedback on it too! For free (knock on wood). 

Of course, there is no substitute for visiting places, talking to smart people in person, and reading quality literature. In my case, I'm signed on for a workshop in "restauranting" next month, which goes at around € 90 + travel; I have to buy a book on the subject, which is also around € 90 (I also own several good books already, worth about the same per book); and my monthly Harvard Business Review of € 15 is invaluable to me. There will also be plenty of travel in the next years, trying to come up with a good location, and ideas for the type of business I want to set up, each with its own costs. For the latter, it really helps having friends all over the world :).


 

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