Two Reasons Why Market Research is Avoided

There is a very popular saying that tells us “failing to plan is planning to fail”.  Most people know the saying and it isn’t a difficult one to understand, yet it is the single biggest reason why start-up businesses fail.  Planning starts straight after the business idea has been conceived with market research, or at least it should.  Too many businesses though fail to undertake this most vital piece of planning, resulting ultimately in their failure.  There are two common reasons why budding entrepreneurs fail to carry out market research; impatience and fear.

Impatience

To undertake market research thoroughly enough for it to form the solid base of a new business takes time.  Sadly time is a resource that many starting up their own business simply don’t have therefore market research gets overlooked in the haste to have a business up, running and making money.  For others the excitement of the possibility of setting up a business sweeps them away and the entire market research phase gets totally ignored.

Fear

Carrying out a piece of research always entails the possibility of the results disproving the hypothesis, in other words, a concept can turn out not to be a valid business after all.  This fear that market research might lead to the business idea being proved unworthy frequently results in the process being avoided altogether.  For entrepreneurs with an original business concept the biggest fear is having their idea stolen and with it all the millions of pounds it would have made them.  In their determination to keep the concept a secret market research is limited, or even worse, totally avoided.

Should a business journalist know better?

Having seen the article ‘Motorola Cheaps Out With Moto X’s $500 Million Ad Budget' promoted on Linkedin this morning, I read it partly to see what the nonsensical headline meant and partly because I was interested to find out about Motorola’s new smart phone.  I’m none the wiser about the headline, however this isn’t what frustrated me about the articles author, Sam Grobart, and where I believe a business journalist really should know better.
My frustration with the article lies at the beginning of paragraph six with the sentence “Advertising gets a lot of attention, but marketing, sales, and promotion are arguably more important”.  I spend quite a lot of time training entrepreneurs on marketing, a concept which I believe is essential for business success yet a concept which many business owners simply don’t fully understand and neither it seems does Sam Grobart.

Anyone who has studied business even to GCSE level knows about the Marketing Mix, part of which is Promotion and that advertising is itself a form of promotion.  It isn’t just that this is such a fundamental error from a senior writer at Bloomberg Businessweek, one of America's largest business publications, that is frustrating, as much as it makes educating business owners about marketing far more difficult when simple concepts are confused by those who should surely know better.

What is the most important thing in business?

This is the first question I ask when presenting on marketing to business start-ups at Rockstar Youth events.  The replies always include good product, good customer service, honesty, integrity and profit.  All of which are important, I tell them, but not the most.  The answer is simple, it’s selling!  If you don’t sell anything you don’t have a business.  Obvious as it might be, it’s always surprising to see the look on these budding entrepreneurs faces, they’ve though about how they can make their products or services as good as possible, how they can give good customer service, everything except how they are going to get people to buy their offerings.

Similarly mentoring business start-ups at the Workbiz Academy I hear the same tale of I’ve got a logo, business cards, a website, and an office, I’ve got a business!  Sorry, no you haven’t, you’ve got a logo, business cards, a website and an office but until you’ve got customers or clients paying for your service you haven’t got a business.  Again the look of stunned realisation on their faces is disconcerting.

It’s wonderful that so many are deciding to go it alone and set up their own business in what are still uncertain economic times.  Even better is the desire to provide high quality services and products along with good customer service.  However the need to focus on how to sell and make their business successful is vitally important.  It is start-ups and ambitious SMEs such as these that provide the inspiration for this blog, good luck to you all.