The chances of a small business surviving passed its teething period are never good, with half of all startups falling to the wayside after five years. Here are four data collection methods that can help you beat the odds, even before starting your business.
Simply asking questions could mean the difference between success and failure for any business, no matter what its size. Even multinational corporations (MNCs) do their research first before launching a new product or service. Similarly, entrepreneurs should invest in research before starting their business.
Gathering information through research is exactly what co-founders Zaina and Rania Kana'an did before they launched Ananasa, an online marketplace that enables artisans, artists and designers in the Middle East to sell their work worldwide.
"Most of our studies have been through focus groups and surveying as well as using major search databases like Euromonitor and Nielsen to acquire market statistics and trends like internet usage, penetration, population changes, lifestyle habits and economic changes," says Rania Kana'an, who moved from Montreal to Dubai with her sister.
A good thing to remember is that in addition to finding out information about your potential customers, you could also seek data about competitors, suppliers and the general marketplace.
There are a number of ways you could choose to gather information. Online surveys, focus groups, individual interviews and major market databases are four methods to help you collect data, each with their pros and cons.
1. Online survey. This offers a wider audience reach and relatively unbiased opinions about whatever topic you choose to survey. Although online surveys are a comprehensive platform, the effectiveness of this method depends on whether your potential customers are, of course, ones who also tend to be available online to do surveys. So when employing this method, make sure you are confident about the demographic make-up of the database you are using.
2. Focus groups. This method allows you to gather more in-depth information compared to mass surveys. Dealing with focus groups means you can choose precisely the types of people to participate, which gives you control over the quality of information you receive. You will most likely need to hire a research agency to do this for you. Like any other option, however, focus groups have their downside. Participants may feel under pressure to agree with the group's dominant view and, in some cases, moderators may inadvertently encourage participants toward one result over another.
3. Individual Interviews. One-on-one interviews allow for more focused discussion. In addition to the non-verbal cues that you may also get from focus groups, individual interviews allow for objective context from your chosen interviewee. Unfortunately, though, time requirements for these interviews can be quite significant. These also have a tendency of representing only a limited perspective on the issue at hand. So take caution.
4. Indicators from market research firms. There are a number of global and regional market research companies that give comprehensive analysis on various industries. Some information is made public while others are available for a fee. Most MNCs rely on these reports and you will also benefit from getting an insightful look at the market as a whole. However, as a startup, your budget may not allow you to acquire everything you need from the reports.
Whatever research method or combination of methods you choose; you are increasing your chances of success when you employ any number of these tools. So go ahead and ask those burning questions. Start today.
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