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Market Research Leads To Better Decisions
Written by: Richard WollerArticle Overview: There's an old adage that entrepreneurs are risk takers, but it's really not true, although it appears that way because they have creative ideas they are able to execute to start up and drive successful businesses. Entrepreneurs and good managers achieve success because they do their homework (market research) before making decisions.
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Market Research Leads To Better Decisions
Whether you are starting a business or trying to make decisions about operating a business, market research is a sure fire way to learn about the environment an entrepreneur will be or is working in. Having a "gut" feeling about business decisions works for some people, but more often than not leads to bad decisions sometimes costing the business a lot of money - money that would have been better spent on market research to make "data driven" decisions to get the right answer the first time.
For example, I have never met a restaurateur who desperately didn’t want to know how their business was faring against their competitions. Needless to say, restaurant owners don’t readily offer such information so how does a restaurant owner find out about their competition? There could be a few ways. The first and what many owners’ do is the old “count the cars in the parking lot” method. There is certainly a way to learn more about one’s competitors, but very inexact and time consuming. Do you really have time to drive by your competitors’ restaurants during the lunch & dinner hours, seven days a week for weeks at a time during each season? Probably not, but if you are a boot-strapper, this form of market research is a start.
Another method is to join national associations to get surveys of the restaurant business. Useful if you are interested in national trends, but totally impractical if you want to learn about the performance of restaurants in your LOCAL MARKETPLACE.
Finally, the restaurant or any other business can hire a market research firm to organize a study of your local competitors that would be confidential and timely. You want to compare your business’s performance against the average of your competitors in an ongoing, cost effective way. Seat turnover, average daily check, food and beverage revenue, revenue generated per seat are just a few of the metrics Plum Market Research uses in aggregate to help the entire competitive set understand their market position in the LOCAL MARKETPLACE.
This method allows the business to track the effects of menu and pricing changes, operating hours and marketing plans, and could save the business money in the long term by making data driven decisions, rather than instincts.
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Article Tags: bad decisions, beverage revenue, business decisions, business market research, check food, dinner hours, food and beverage, gut feeling, local marketplace, lunch dinner, market position, market research firm, metrics, money money, national associations, national trends, plum, restaurant business, restaurant owner, restaurateur
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