The quality of the business decisions you take is dependent upon the quality of the information you have. Whether you are currently thinking of making the leap to leave your full-time job in preference of a freelance career, or are an existing freelancer looking to expand your market share, break into a new industry or even fine-tune an already successful business, market research could be the key to your success.
Making sure that you know the market that you are trying to enter will help focus your mind on the variables that will affect the profitability of your venture.
Market research is the process of gathering information and data on your customers, competitors and the market, the analysis of which should guide you as to whether there is a sustainable need for what you have to offer.
The business link states that there are two main sources of market research information:
- Primary research - involves the collection of new information, for example, market surveys, telephone questionnaires and focus group research in direct contact with customers.
- Secondary research (also known as desk research) - involves accessing data that is already available, for example, economic trends and specific industry sector reports.
As a small business owner you may be thinking that market research sounds a costly business, so you may as well learn as you go along. Some basic market research will still benefit you from readily available resources to discussing your plans with close contacts, be they friends, family or colleagues. Yellow Pages and other local directories, trade magazines and publications, local business press and the internet will reveal details of companies and other freelancers offering the services that you would like to provide. If details of charges are not available in their marketing material (with blogging at the forefront of business marketing, businesses have never been so 'open') or adverts then you could send them an email or call them to see what their charges are. This is also a good opportunity to check their customer service skills and techniques and to get a feeling for how busy they are.
If you have industry contacts why not use these people as a sounding board for your plans and ideas? Existing clients are often only too pleased to help if you have a good working relationship with them. They may even point out pitfalls and other avenues to explore that you would not have thought of. Sometimes offering a reward or incentive for completing a questionnaire or a short telephone interview can make clients more forthcoming. Calling a cross-section of your target market to answer a few survey questions will help you ascertain whether the proposition you are offering is viable. It is also a good chance to brush up on pre-sales techniques and if you are really lucky to get some hot leads for when the service is launched. Make sure you've thought your questions through beforehand so you don't come away with just 'yes' and 'no' answers for all your hard work.
Once you have found some direct competitors there are many tools that will allow you to find out more about their business, especially if they have formed a limited company. You can use the ICC company search tool available on one of our affiliates sites SJD Accountancy. This tool will allow you to search Companies House and download reports detailing directors and finances. These reports cost a few pounds and for the information, you can glean from them are well worth the cost, you must also be a registered user of the website to purchase these reports.
Take note of any negative responses you encounter rather than being swayed by the positive answers you want to hear. Realistic feedback that enables you to adapt your service from the outset is what market research is all about.
Things that you need to investigate
- Who else is already in the market?
- What are their costs and overheads?
- Do they specialise in any particular skills/area/fields?
- How do they promote and advertise their services?
- Who are their clients?
- What do they charge?
- How busy are they?
- What have your competitors been successful at or failed at?
Your Potential Customers
- Who are your potential customers?
- Are the companies in a certain industry sector/of a certain size or location?
- How many are there?
- Are they ready for or in need of your services?
- Are there any needs not currently being met by your competitors?
- What external creative or media services do they already employ, how often and why?
- What price would people be prepared to pay?
- Are changes taking place in the market you're targeting? How might this affect what you sell?
- Is there any forthcoming legislation likely to affect your market?
- What is the general economic climate?
More on sales and marketing as a freelancer.