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The benefits of research

How to research before you expand or set up

If your new year's resolution is to launch a different product or to expand into a different market then research should be top of your priority list. But many growing businesses view research as too expensive or time-consuming. The reality, though, is that if you don't do your homework you could end up losing money in the long-run.

Rupert Merson, partner at accountants BDO Stoy Hayward, says there are several ways in which a small business can conduct its own research without calling in a firm of consultants. He says that discussing ideas with your customers should always be a priority.

Talking to them in person - rather than by telephone or sending out a questionnaire or e-mail - will always produce most information. You will find many customers very willing to help - particularly if they think it will improve the service. Once you know your customers' needs and future plans you will be able to tailor your expansion to make the most of their strategy.

Outside help

Sometimes a business is so keen to expand that its managers are unable to be objective about whether their ideas make commercial sense. Listen to advice from people who are one step removed from your business. They may already have done research into the market and will also be more dispassionate about your plans.

Advisers: Bank managers and accountants should have their ear to the ground. If they're part of a larger network they will be able to provide information from different parts of the country or abroad.
Trade associations and chambers of commerce: They are particularly useful if you're considering entering a new overseas market.
Non-executive directors: This is exactly the sort of situation where they should come into their own. A good non-exec will be able to draw on their own experience of starting a new business, moving into a different part of the country or launching a new product. They should also be able to provide industry contacts who will have up-to-date information.
Universities: Approach the department of Business Studies at your local college or university and suggest students carry out some market research as part of their course work.
Internet: This is a good starting point for any research and will help you to ask the right questions. But Mr Merson says it's important not to treat everything on the Web as 'Gospel Truth'. Always follow up with your own research.

Location, location, location

Research is vital if you're thinking of moving your office, shop or factory. Mr Merson says that, as with any property deal, the three most important points are: "location, location, location". He adds that company directors are often particularly bad at being objective when it comes to choosing a new site. They are easily seduced by the gleaming new paintwork or nearby cafes.

Bring along a dispassionate observer when you're looking at new premises. The advice of a non-executive director or even a friend who's in business can prove invaluable.

Ask yourself the following:

Where will customers park and is the road one-way?
Is it easy for customers to arrive by foot: where is the tube station or bus stop, is the traffic very heavy?
How close is the competition?
How many competitors are there and are you aimed at the same market? (Having a rival nearby can actually boost trade for both of you).

Useful links

BDO Stoy Hayward www.bdo.co.uk

For free Government advice on exporting www.tradepartners.gov.uk

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