Market Research

HERE’S HOW YOU MAKE AN EDUCATED BUSINESS DECISION SEEM EASY

Being a responsible business owner and entrepreneur means that you use your foresight, knowledge and intuition to strategize and make a plan that achieves your personal business goals.

But how exactly, do you make a good, sound business decision? How do you decide what to do and when? Well, I’m going to give you an easy 4-step process to use that will make business decision-making faster and more effective.

1. Ask the Right Questions

I can’t stress this enough. Take the time to formulate exactly what decision needs to be made. It should be goal oriented and you should be able to measure its success (meaning you can gauge whether that decision was the correct one to achieve that goal)

As an example, let’s imagine you just started a coffee shop. What hours of operation should you have?

In this case, good questions to ask might be something along the lines of “What hours of operation will meet the needs of my customers?” and “How can I maximize sales while keeping my payroll expenses as low as possible?”

2. Gather Relevant Information

There’s a few different ways to go about this and, to be thorough, you should gather as much relevant information as possible.

The first thing I’d suggest is to conduct secondary research. Walk around your neighbourhood and look at the hours of operations of your nearest competitors. Perhaps they know something you don’t know (like what time people in your neighbourhood begin to commute to work or when rush hour is. ). Research local government statistics on your neighbourhood demographics and find out if there’s any information that might be useful. For example, is your community composed of retirees or young families and are there any schools or hospitals in the area.

Now it’s the right time to conduct primary research. This is information you gather yourself usually through questionnaires, surveys and interviews. Ask your neighbouring businesses what times they open and why. Ask your current customers when they usually go for a coffee and when is the best time for them. The decision you’re trying to make might be answered simply by asking the right people.

Even Googling “What time should I open and close my coffee shop” might give you important info that you hadn’t considered.

All of this information is important when deciding what hours of operation to set.

3.  Make a Hypothesis to Test

Once you’ve researched and gathered information, make a choice that best answers the questions you posed originally. In our example, those were what hours do my customers need, what hours are the busiest and how many staff do I need during the busy period.

Once you’ve made a decision, it’s time to test it. Until you know that it’s the correct decision, it’s still just a hypothesis.

4. Test, Measure, and Evaluate

The fourth step in the decision-making process refines the decision you made in step three and solidifies your choice as the correct one for your business. Testing your hypothesis might consist of trying out a choice for a set time period, measuring the results and determining what changes will add the most value and be the most beneficial.

In our case of the best hours for a coffee shop, choose your hours of operation that best meets the needs of your customers without over staffing or under staffing and try the schedule out for a few months. I’d suggest you try scheduling seasonally for a coffee shop but give yourself enough time during the test to collect enough data. In our case, do you have enough sales and man-hours to decide what the peak hours are and how many staff are needed to handle operations effectively and efficiently?

Measure your sales per hour and determine your peak hours and slow periods. Perhaps you’ll realize you need one staff member to open, two during the lunch period, and only one to close. Or maybe you’ll discover that that schedule only happens on Monday through Thursday and that on Friday, customers come after work enough to make scheduling two staff members from lunch to close the best choice. If your sales spike during the weekend morning hours, you might decide to schedule two staff on those mornings instead.

Finally, tweak your current schedule and make your final decision on your hours of operation based on the results you measured from your test. And ensure that your decision answers the questions you asked so you haven’t strayed off target from the business decision you needed to make.

It’s also really important to stay calm and try not to rush through this process. Over time you may be able to simplify steps to become more efficient in decision-making but the steps are too valuable to skip entirely.

~Rob

Thanks for reading and I hope you find my information useful. As usual, if you have any questions or comments please feel free to comment below.

Be sure to follow me on Facebook and visit my website, robrosenblattconsulting.com to see what I can do for you.

Do some research!

It’s extremely important to do your due diligence when beginning your business. That means asking questions. A lot of them. And naturally, asking the right questions is vital.

So what does that mean? Well, In broad terms, you’ll want information about the size of your current market. Will your business be viable in this location? Can the market support and sustain you? If you want to start a restaurant it would be helpful to know,

-Your neighbourhood demographics

-Local competitors

-Socio-economic information

-Any future plans that might affect the neighbourhood and your business

That’s why I recommend that all business owners take the time to perform a SWOT analysis.

Simply put, a SWOT analysis is a thorough study of the Strengths, Weaknesses, Opportunities, and Threats that will affect your business. Strengths and weaknesses are considered internal and examples could include being an established brand with an excellent reputation or  having exceptional staff like a Michelin star chef. Conversely, having a young inexperienced staff might be considered a weakness.

Opportunities and threats are external to your business and examples could be your location having a university or hospital close by or perhaps there’s a huge condo building being constructed next door to your restaurant. A possible threat to your business might be things like street construction that would detour traffic away from you.

It’s important that you know what you’re getting yourself into when you start your business to ensure you get the best possible chance of success.

~Rob

Thanks for reading and I hope you find my information useful. As usual, if you have any questions or comments please feel free to comment below.

Be sure to follow me on Facebook and visit my website, robrosenblattconsulting.com to see what I can do for you.