Fear can have a powerful chilling effect on business. “A lot of good ideas don’t get turned into companies because the potential founders are too fearful,” Dr. Philipp K. Berger recently told the Wall Street Journal.
A management consultant turned researcher, Dr. Berger surveyed nearly 600 entrepreneurs to better understand the role of fear within start-ups. According to his findings, entrepreneurs are particularly prone to anxiety and decision overload. However, breaking down large decisions into smaller steps can help entrepreneurs cope and keep moving forward.
While starting a business can be a challenging process, the good news is that market research is one of those “smaller steps” entrepreneurs can take to minimize risk, increase confidence, and boost their chances of success. Here’s a look at three common fears entrepreneurs face and how market research can help combat them.
Fear of running out of capital
This is a universal concern that keeps many entrepreneurs up at night. Starting a business requires significant personal and financial investments. If your business burns more money than it brings in, you won’t be able to keep the lights on for very long without securing additional sources of funding.
Fortunately, market research can help you identify opportunities to increase your profitability and lower your overhead costs. By taking the time to understand the competitive landscape, you can build a better business model and make a stronger pitch to investors.
For example, market research can help you pinpoint critical information such as:
- Who your core customers are
- The market value of your product or service
- A realistic pricing structure
- What your potential sales may be
- Whether or not the market is already saturated
In addition, by studying similar enterprises, you can uncover hidden expenditures that you may not have expected, avoiding unpleasant surprises down the road.
Fear of the unknown
If you are a business owner, what you don’t know can hurt you. It’s important to remember that “knowledge is power.” The more you know, the more prepared you will be when unforeseen problems arise.
Business intelligence will help you understand a variety of factors that could influence your chances for success, such as:
- Seasonal and cyclical trends
- Competing markets
- Regulatory requirements
- Customer concerns and needs
- Regional economics, culture, and politics
While you may not be an expert in all of these areas, market research can help fill in the gaps and uncover important factors that influence market size and direction of growth.
Fear of failure
Only half of all new establishments survive five years or more, according to the Small Business Association. With odds like these, doing your homework ahead of time is more important than ever.
Market research can help you avoid many common pitfalls that entrepreneurs face, from unexpected market shrinkage to new technological hurdles to misdirected advertising.
Moreover, market research can help eliminate any blind spots you may have as an entrepreneur by providing you with non-biased factual information that clearly outlines different market risks.
As Dr. Berger noted, fear “is a normal part of the entrepreneurial process.” Being aware of your fear is an important first step. However, what you do next is just as important. Investing in quality market research can empower you to overcome your fears and make your start-up a success.
Finding the right market research solution
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