Market research and business plan: the basics
6 min
Do you want to start your own business? Begin with some solid market research and a business plan.
Start with publicly available data
Golf ball retriever, chocolate consultant, event management office, drone flying school... Your idea may be interesting, but if you want to know if it's commercially viable, then market research is needed before you actually launch your new business. The aim is not only to ensure that there’s a market for your idea but also to improve it as much as possible so that your new business gets off to a good start.
Market research is always a laborious process. To begin with, however, it's not complicated. There’s a lot of data that’s publicly available, and useful information is at your fingertips. The Statbel website is full of statistics on Belgian businesses in all sectors. You'll learn a lot, especially about the market you're targeting.
If you prefer to conduct your own research, then you’ll learn a lot by talking to prospective customers, potential partners or even competitors. If someone in your region has already had the same idea as you, it's worth going for a coffee together!
Qualitative or quantitative study?
The difference between qualitative and quantitative market research lies in the number of people you interview. If you want to launch a new product or test an innovative idea, qualitative market research involves putting open-ended questions to a limited group of people. Is the owner of the golf club interested in your golf ball retrieval project? The sample of people interviewed must be representative of your target group. What are their expectations regarding your product/idea? What elements interest them? Which ones could be improved and how?
A quantitative study is conducted on a much larger scale, because it’s the volume of opinions and responses that’s important. It's a good idea to draw up a limited list of clear questions. Then, you'll need to put them to people, call, send emails and post on social media. Tip: if you want to encourage people to respond, a small gift works wonders. If you plan to launch a drone flying school, you can offer all respondents the chance to win a free taster session.
Effective market research in five steps
Market research isn’t difficult or complicated if you follow the right method. The most important thing is to do things in the right order, which will allow you to get relevant answers.
- Start by asking yourself what you want to know exactly.
- Develop a questionnaire based on this.
- As a precaution – and because it's always a good idea – put the questions to a small test group first. Adjust them if necessary.
- After finalising your questionnaire, you can send it to the full panel.
- Collect the responses and get to work.
SWOT: strengths and weaknesses
Effective market research requires honest analysis. With a SWOT analysis (strengths, weaknesses, opportunities and threats), you're looking for both the strengths and weaknesses of your idea or product in the responses collected. This will also allow you to identify potential opportunities. For example, you might discover that drone flying can be useful in precision agriculture. Finally, you'll also need to be vigilant about threats that could compromise the success of your business.
As an entrepreneur, it’s in your interest to gain as much information as you can from data analysis. Self-knowledge and knowledge of your product's potential are the fundamental ingredients of a successful business plan. So your market research provides you with the most valuable thing you need to launch your business: awareness of your own capabilities and potential.
Business plan: bringing your business project to life
Your market research is an additional asset when launching your business. You're ready to develop a business plan, which will be the foundation of your project. The plan will contain a lot of information. You'll use it to explain your business project in clear terms, but also as a reference to adjust your aims as needed.
The time you invest in a good business plan will save you a lot of time later on. A well-prepared business has a much higher chance of success: it enters the market with a discerning, realistic approach, it avoids pitfalls, and it limits errors and commercial risks. These things are worth their weight in gold.
That's why it's essential to start your business plan with a good summary of the entire project. You don't need to write a novel: a single A4 page summarising the essentials is enough to spark the interest of readers in the rest of your plan. Don't forget that your business plan must get potential investors to open their hearts (and wallets). So it's necessary to inform them quickly about the prospects of your project.
Down to the smallest details
Details are important, especially in a business plan. People who continue reading after the introduction are genuinely interested. Moreover, the plan also allows you to track your progress. So it's essential not to rush and to approach the lessons learned from your market research step by step. Your business plan should explain:
- What your product looks like or how it solves a specific problem
- The market situation and your competitive advantages
- Your target group and how you'll reach them
- How you'll market/promote your product
SWOT: in-depth analysis
The SWOT analysis (strengths, weaknesses, opportunities and threats) undertaken as part of your market research is an essential element of your business plan. Many entrepreneurs, even if they have start-up capital, rely on investor support to bring their projects to life. Investors will be all the more inclined to support you if you know the potential of your business, but also – and especially – if you've identified the main challenges you need to overcome. By addressing them openly, you demonstrate that you're fully committed to your project and ready to face potential obstacles.
Honesty is crucial. It shows that you'll be able to address weaknesses and overcome the challenges of your project.
Put yourself forward!
"I am the business!" could be the motto of many entrepreneurs. Even if your project isn't just about you, it's essential to tell your personal story. Show how you'll launch, manage and represent the business.
But that's not all. Your management team also deserves to be featured in the business plan. Their experiences and skills are essential for your business to live up to its promises and achieve its objectives. For potential investors, this means a higher probability that they’ll get a return on their investment.
Finally, be precise. What legal form will your business take? What will be your various sources of funding?
Finances: the cherry on top
By detailing both your starting position and future prospects, the financial section of your business plan should provide a complete picture. Your profit forecast should show that you’re sincere about the project. By being absolutely honest, you're preparing for all scenarios. If you know how you'll act in each situation that arises, that’s excellent news. The less uncertainty you leave, the more convincing you'll be. Forecasts are an essential part of the financial section: market developments and sales growth, a suitable pricing policy, potential profits... The more you can support these elements, the more solid your business plan will be!
Of course, we'll be happy to help you. Our business plan template is already a good starting point. There are also various public organisations that can support you and potentially give you a grant.
In Brief: five valuable tips
There are obviously many examples of good practice. But by following these five tips for your business plan, you'll be on the right track:
- Be realistic. Provide solid and honest information in your business plan. This will make you more convincing to investors, who particularly appreciate rigour, honesty and realism. Your business plan must therefore be based on these values.
- Correctly assess how much start-up capital your project will need. If the financial section of your business plan is well-structured, that will only benefit your business.
- Ensure that your revenue assessment is realistic. To do this, examine the market and keep an eye on the competition. Base your financial plan on credible assumptions. An entrepreneur with both feet on the ground inspires confidence.
- Launch at the right time. This means only when you and your business are fully ready. Start your business when your products and services are ready for customers and when you're sure that you've met the administrative requirements. Also, check that your business is able to meet market demand.
- Update your business plan. A business that evolves in a changing market is a business that can detect changes in good time and take advantage of them.
Give your business project wings with the many benefits of the Starters Kit.