The BizFilings blog covering business tips and trends.
Does Research Play a Role in Your Small Business?
Published on Oct 5, 2011
Does Research Play a Role in Your Small Business? Find out more at 'Time to Start Up,' the small business blog by BizFilings.
If not, it should.Research is a cornerstone of small business success, affecting every facet of your company. To follow are some of the most important ways you can utilize research to your advantage:When You Incorporate
Research will help you determine which business formation is best for your company. Before picking an LLC, S corp or C corp as your formation type, you need to truly understand the differences between each.
This also holds true regarding where you choose to incorporate. Your home state may not necessarily be the right place for you to form your business. And although many businesses — including Fortune 500 companies — choose Delaware as their state of incorporation, it may not be right for you.
The only way to know for sure is to do the research. Take some time to talk with your accountant, and make use of the incredible power of Google.
When Creating or Amending Products or Services
Just because an idea for a product or service seems incredible to you, doesn’t mean it is. Or maybe it is, but there are already ten companies providing it, meaning the market is flooded. Taking the time to research your new product gives you information (often referred to as metrics) to gauge whether or not you want to move forward.
Let’s say that the market is flooded with a particular product, but upon further inspection you find that the quality of the product, from all ten manufacturers, just plain stinks. If you have the resources to make your product far superior to theirs, you may crush them all — or at the very least create a niche for yourself within the market.
A great example of this is Apple, and their mercurial growth over the past ten years. Even in a crowded marketplace, their ability to create beautiful products and groundbreaking innovations have carved out an ever-growing niche. Simply put, they stand out from the crowd — in a big way.
Where Your Open a Store
Research will also guide you on where to open a store front. Although it may be tempting to save $1,000 per month on your rent, it may cost you $10,000 per month because there’s not enough traffic to do good business at the location you chose. Or maybe the traffic is terrific, but your product isn’t relevant to the people passing by.
I recently noticed that a new pizzeria had opened in my neighborhood. It opened in the same exact place as a pizzeria that had recently gone out of business. I wonder if this new company did its research before signing the lease. My first question would be: why did the last place close down?
As you can see, there’s no end to how research can help you determine a positive course of action. It is time consuming, but so is running a business. Wouldn’t you rather be spending your time growing, instead of trying to fix mistakes that could have been avoided?