I hate it when people think a business plan requires market research. Especially when they’re talking about expensive professional Market Research.
Yes, you need to know your market. You do. You can’t plan your business without understanding who buys, what those buyers are like, who also might buy, why they would or wouldn’t buy, how many of them are there, what motivates them, what they like about your business, what they don’t, and what other choices they have.
But planning a business doesn’t necessarily require expensive rigorous market research. You have to know the market, not prove that you know it. Not even prove that the market exists.
Sure, there are a small subset of business plans, associated with raising investment, that have to prove potential market to convince investors that the opportunity exists. But most business plans are about running the business, not proving the opportunity to outsiders.
Yes, you have to know your market. Knowing your market enough to make good decisions is different from proving your market to outsiders. Lots of entrepreneurs trust their market knowledge, take risks, and move forward. If you’re one of those, plan, and don’t let anyone tell you you’re not planning unless you have market research.
4 thoughts on “Not All Business Plans Need Rigorous Market Research”
I categorically agree about needing to know your market. What many start-ups wrestle with is where the sweet-spot is between no research and market analysis-paralysis. Also the confusion on the term marketplace – customers/competition/both?
Joel Spolsky, Co-founder Stack Exchange, extols a straightforward approach “Talk to your customers. Find out what they need. Don’t pay any attention to the competition. They’re not relevant to you.”
Thanks Steve, great addition. It’s amazing how often we forget to start with the basics — like talking to your customers — and jump to the outriders. Tim
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