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Posts for December 2009

Happy Christmas from the Start Up Donut

December 23, 2009 by Anna Mullinder

2009 has been a hectic year for the Start Up Donut. Since launching in July, we’ve been working non-stop to bring you new features, articles, interviews, tips, blogs and advice on starting and running small businesses effectively.

We’ll be recharging our batteries over the festive period, so @StartUpDonut will be away from Twitter until Monday 4 January and this will be the last blog post until then. The Start Up Donut website will be available throughout that time, so you can still get your fix of start-up advice.

We’d like to say a big thank you to our experts, our sponsors and most of all you, our readers. Merry Christmas and a happy new year.

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Prepare for the VAT rate rise in January 2010

December 22, 2009 by Raphael Coman

Just as you were getting used to the VAT rate at 15 per cent, it’s nearly time for the rate to change again. From the 1 January 2010, the rate will be going back up to 17.5 per cent, after 13 months at the lower level. Many businesses are already using the change to encourage customers to make purchases before the start of 2010, but there are other ways to benefit from the lower VAT rate. The VAT rate that applies is established by the tax point. If the tax point is before 1 January, then the rate to apply will be 15%. The tax point is the earlier of the date the invoice is issued, the date money is received and the date that the goods are delivered or the service is completed. As an exception, if an invoice is raised within 14 days of the supply of goods, then the invoice date will become the tax point. Therefore, you may wish to consider the following options that may be attractive to customers:

  1. You may accept a deposit or a pre-payment before 1 January 2010, which will be charged at 15 per cent.
  2. You provide goods or services in December and more than 14 days before the issue of the invoice. For instance, you must apply VAT at 15 per cent for goods or services supplied before 18 December, for invoices raised on 1 January 2010.
  3. Where you supply a service over a period spanning the rate change, it is possible to charge VAT according to the value of work done before the 1 January. Be careful, though, because you must be able to show that the way that you have split the value of the work is fair.

There are special rules to prevent avoidance of VAT by establishing a tax point before the new rate comes into force. Under the rules, a 2.5 per cent VAT charge will apply where:

  • The total value of sales are more than £100,000 (and the advance invoice or pre-payment is not normal commercial practice)
  • The supplier and customer are connected
  • Payment is due more than six months after the invoice date or
  • you provide funding for your customer to make a pre-payment.

HMRC has indicated it will only seek adjustment to an error on a VAT return relating to the rate change where there has been an overall revenue loss. With careful planning, there are ways to reduce the impact of the VAT change on your business, but the fact of the rate rise is unavoidable. To prevent misunderstanding, it may be prudent to start making your customers aware as early as possible of the VAT change and any increase in prices that will result.

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If you're good at what you do, you won't need to compete on price

December 22, 2009 by Fiona Humberstone

"If it's worth doing, it's worth doing properly" my mum always used to say. We never had much money when I was growing up, but whenever mum did buy something, she'd always make sure it was of the best quality she could afford. She understood the false economy of buying something cheap that would break within days. And although we were never flush with cash, she would rather pay for quality.

I don't think we were alone, and I don't think that attitude is confined to the 80's! Most people would rather pay for quality than search out the cheapest. And the old adage "you get what you pay for" is just as true now as it was 25 years ago.

If you're good at what you do, whether that's a great product or top quality service, then you won't need to compete on price. People will recognise the value in what you're offering and they'll be prepared to spend more. Or will they?

All too often I meet small business owners who are struggling to earn a living because their clients don't want to pay what they need to charge. They're having to be the cheapest or discount just to get the job. Why? Because their customers don't see the value in what they're offering.

And this is partly down to your sales process, partly down to what you've written on your website/ brochure and partly (largely if you're not doing the selling) down to the fact that your brand isn't communicating confidence or professionalism.

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Business cards & networking

December 21, 2009 by emma williams

You arrive at networking event, your main aim is to talk to like-minded people about their business and your business - in that order.

I’m new to networking events, some have been great and some have been bad but from every event I have walked away with something - a business contact or an information pack, a goody bag, a lollipop or just simply a great experience of networking. Every event I have been to I have walked away with one thing NOT to do. The same thing NOT to do has presented itself every time!

You arrive at a networking event; a person makes a beeline direct for you. Before you get chance to say "hi", you have a business card stuffed in your hand and someone barking at you. Rule number 1: you must learn to listen. We know we don’t shout about how good we are often enough but listen first, then you won’t have to shout as you will have your audience. I prefer to have a chat to someone and then decide whether this person needs a business card. It may be that this is your biggest competitor so why on earth do they want your card?

My latest networking event ended with me having a great day and heading out in the lift, thinking that I hadn’t had that person pounce on me today! My luck was out. The lift doors closed, I only had one floor to go and in this time I had a business card stuffed in my hand - I knew the name of his company, where his office was and what he supplied just as the doors were opening on the ground floor. He walked away and I said nice to meet you too!

Emma Williams – justbooked.co.uk

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Start your new business efficiently

December 18, 2009 by Heather Townsend

1 Plan your marketing
Far too often, new businesses take a scattergun approach to marketing. They spend a huge amount of time and focus on marketing – which is correct – but there is no cohesive strategy, plan or thinking. So what happens is, 80 per cent of their marketing efforts results in little or no return.

If you have done your homework, you will be clear about how you help your target market with their ‘pain’, know where your target market hang out and how best to get your message to them. Use this knowledge to plan your marketing, so you focus your marketing on your target market, in a place where they will see it – and in a way that will encourage them to take action.

If you believe that word-of-mouth is going to be all the marketing you need, think again. Word-of-mouth works very well when you are an established business with a good name. Until you are an established business, word-of-mouth, in isolation, will not be an efficient marketing strategy.
Think very carefully about taking an enhanced listing in a physical or internet directory. When was the last time you looked in one of these for a tradesperson or supplier?

2 Know your costs
I’m going to be blunt. If you don’t know the cost of running your business, it normally means you are running your business as a hobby. Poor financial management of a new business is one of the main reasons for a new business to fail in its first year. Poor cashflow is a major factor in this. If you sell to businesses, see how short you can make your payment terms. For example, can you ask for some cash up front?

3 Look for recurring business opportunities
At the start of your business life, most of your business will have to be won from new clients. Winning business from existing clients is estimated to be between seven and 14 times easier than winning business from a new client. Aim to target new business from clients or customers that are likely to result in recurring business.

4 Be flexible
No one can predict exactly how your new business is going to perform. In the first 12 months of trading, you will probably need to tweak part of your business and marketing strategy. If you keep yourself open to opportunities and possibilities, you are more likely to be able to change strategy before it costs you time and money.

5 Work to your personal talents and strengths
In the early days as a one-man-band, you are going to have to be all things to all people. There are always going to be tasks that don’t fit your personal preferences. For me, this was bookkeeping. Be honest with yourself and outsource or delegate any tasks that can be done by someone else, without materially affecting the running of the business.

6 Set and write down business goals
Only about 3 per cent of adults have clear, written goals. These people accomplish five to ten times as much as people of equal ability and standing, but who, have never taken the time to write out exactly what they want to achieve. It’s the same with new businesses. Those businesses that remain focused on their goals are more likely to achieve greater things. In the early days, you are on a steep learning curve, so you will need to revisit these business goals every three months.

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The problem with money (too much)

December 17, 2009 by Chris Barling

Last month we talked about starting a business on very limited resources. This time, I would like to think about the problem of having too much time or money.

Having too many resources can distract you. In contrast, when money is tight, you’re focused on just doing what is truly important. In any start up situation, you should only care about discovering two things:

  1. What customers want and your capacity to deliver it.
  2. How to get it into the customer’s hands at a cost that makes a profit.

Cracking the above two points and then becoming cashflow positive is the surest route to business success. Failing to focus on this is the surest route to failure, whatever the bank balance. I speak as someone who has not only started their own company, but who has invested in a variety of start ups, some with tremendous success, and one that has been an abject failure.

Two of my investments (actually the ones with the most potential and both of whom have raised millions), are also teetering on the brink of failure. The reason? Too much money, with one having raised more than £10m over several funding rounds. Having too much money encouraged both to try and tackle multiple markets before they had fully established themselves in one. It made them feel that becoming cash positive was an optional extra. After all, they could always raise more capital. And they seem to pay enormous salaries, far above what I pay for higher caliber staff in my own business.

In my opinion the lesson is simple. Focus your efforts on providing what is wanted. Then deliver it at a profit. Don’t do anything else. Becoming profitable as fast as possible makes long term success much more likely.

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Why would ANY boss hire a woman?

December 16, 2009 by Clare Bullock

As a start–up business, one of the most crucial elements will be employing a strong and reliable team. But how do you judge if someone is likely to be a reliable employee? One of the issues that can affect your team in the long term is maternity leave.

I was shocked to read Alexandra Shulman's recent article for the Daily Mail, ('Year-long maternity leave, flexi hours, four day weeks... why would ANY boss hire a woman?'), in which she argued that current maternity law is making women 'unemployable'. 

I found Shulman's article particularly galling given that she is a woman with children who is in a rare position of power as editor of Vogue UK. By her own admission, she was able to go back to work after only 18 weeks off because she had, and continues to have a 'live–in nanny'. This option is off the cards for the vast majority of women, yet her article implies that those who do not, or cannot hand their children over to others are likely to deliver a less than adequate performance in the workplace.

Shulman's is an extreme view, but there is no denying that for a small business, a vital employee taking maternity leave can make things difficult, particularly in the current economic climate. Although businesses that pay £45,000 or less in gross national insurance contributions in a tax year can reclaim 100% of Statutory Maternity Pay (SMP), there are other aspects to consider such as the potential costs of arranging for temporary cover. It can also have a negative effect on your team – promoting a junior employee to fill the position and then effectively demoting them once the employee on maternity leave has returned to full–time work can create resentment.

The Start Up Donut has plenty of information on the legal issues affecting maternity leave and SMP. However, I think there is more at stake here than just the law. The World Economic Forum (WEF) reported this year that the UK has slipped down the league tables for gender equality. The stats are alarming – the UK now stands at 15th out of 134 countries, a drop from ninth place in 2006. According to the Equality and Human Rights Commission (EHRC) women in the UK face an average pay gap of 17%, with the media blaming the gap on women taking leave or working fewer hours when they have children. Compare this to the Scandinavian countries occupying the top positions in the WEF survey, where maternal leave can be up to 12 months, but which have smaller pay gaps. Is there a cultural difference here? If the UK is to really act on the gender equality it promotes, I would argue that all businesses, whatever the size, have a responsibility to ensure that they take maternity leave seriously.

What do you think? Are you a woman who has worried about the results of taking maternity leave or experienced difficulty returning to work after taking it? Have you deliberately chosen a less competitive or pressured career so as not to face these worries in the future? Are you an employer who has hesitated to hire a woman, because, in the words of Lord Sugar, you considered it 'a bit risky'?

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Pre-Budget Report 2009

December 15, 2009 by Raphael Coman

In his last Pre-Budget Report before the general election, Chancellor Alistair Darling unveiled a number of measures aimed at bringing about economic recovery in the UK economy.

For individuals, the allowances will remain frozen at 2009/10 levels, although the pledged increase in income tax for those earning over £150,000 will be introduced on 6 April 2010.

There will be a rise in National Insurance of 0.5% from 6 April 2011, affecting all those with earnings over £20,000. The temporary VAT rate cut will cease on 31 December 2009 and at the same time the stamp duty holiday will end. Due to a lack of rise in property prices the inheritance tax allowance will be frozen at £325,000 until 2011.

For businesses there will be a deferral of the increase in corporation tax and an extension of the empty property relief and of the Enterprise Finance Guarantee for a further year.

Income tax rates and allowances
Income tax rates and thresholds for 2010/11 will be unchanged from 2009/10, with the notable exception of a new 50% rate that will apply to income above £150,000. With the tax thresholds static, the effect of any inflation will cause a real terms reduction on net income.

Pension contributions
The proposals to restrict the pension relief on contributions for those earning over £150,000 were confirmed for 6 April 2011. The Chancellor also announced an immediate measure to prevent high earners from avoiding the restriction by receiving pension payments instead of salary before the new rules take effect. This anti-avoidance move applies to those with income over £130,000.

National Insurance
The increase of 0.5% in National Insurance planned for 6 April 2011 has increased to 1%; double the amount announced in the 2008 Pre-Budget Report. The higher rates apply to employees, employers and the self-employed from 6 April 2011. The limit at which an individual starts to pay national insurance will also increase by £570 on the same date. As an overall effect, those with earnings below £20,000 will not be any worse off.

Corporation tax
At last – some good news. The 1% rise in corporation tax for small companies, which was due to take effect on 1 April 2010, has been postponed until 1 April 2011.

VAT
The VAT rate will revert to 17.5% from 1 January 2010, but no other VAT changes are proposed. For businesses using the flat rate scheme, the percentages are also changing on 1 January 2010. Most flat rates will go back to being the same as they were before 1 December 2008. For certain businesses it may be beneficial to leave the scheme in the new year, which can be done voluntarily. We can help you to decide whether it will stay worthwhile to use the flat rate.

Business rates
The exemption from business rates will be extended one year to 31 March 2011 for all empty properties with a rateable value below £18,000. The increase in the threshold from £15,000 to £18,000 reflects the rise in rateable values from 1 April 2010.

Furnished Holiday Lettings
The tax benefits available to furnished holiday lettings will be removed from 1 April 2010 for companies and 6 April for unincorporated businesses. The changes will not affect hotels or bed and breakfasts. The withdrawal of the treatment will mean that with respect to furnished holiday lettings:

  • Losses will only be available to reduce profits from other property income.
  • Profits will not count towards income on which pension relief can be obtained.
  • Special treatment for capital gains tax purposes will no longer continue.

Stamp duty
The increase in the limit on which an individual starts to pay stamp duty, announced in September 2008, will finish at the end of the year. From 1 January 2010, stamp duty will be payable at 1% on residential properties over £125,000.

Stamp duty is normally charged at the completion date or the date on which an individual takes possession of the property. To avoid stamp duty of 1%, transactions on properties between £125,000 and £175,000 will usually need to be completed before 31 December 2009.

Inheritance Tax
The threshold on which an estate is exempt from inheritance tax was due to rise to £350,000 on 6 April 2010, but it will now be left at £325,000 for a further year. The government has sited a lack of improvement in the property market as a reason for the change.

Other tax changes
Backing from the government for loans to small businesses through the Enterprise Guarantee Scheme will be extended by another year to 31 March 2011.

Banks will pay tax on all discretionary bonus over £25,000 at 50%. The 'super-tax' will be payable by banks in addition to income tax and will take immediate effect.

An employee's use of an electric car will be a tax-free benefit in kind for five years from 6 April 2010. In addition, where a company acquires a new electric van from 1 April 2010, it will be able to deduct the full cost from its profits for tax purposes. Meanwhile, the tax cost of providing non-electric cars and vans as a benefit will increase from the same date.

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Review YOUR 2009!

December 14, 2009 by Holly Gordon

Have you actually considered what you did achieve this year? Whether it’s in business or your personal life, what can you honestly say you are proud to have accomplished in 2009?We’re fast approaching the end of the year. Who’s going to admit it? At least one of us has said “I don’t know where it went!”  It’s almost as traditional as putting mince pies out for Santa! Have you actually considered what you did achieve this year? Whether it’s in business or your personal life, what can you honestly say you are proud to have accomplished in 2009? The beginning of a year can start with great intentions filled with New Year’s Resolutions and comments such as “this is the year it will happen”. The question is, at what point do we review the last twelve months, allowing ourselves to celebrate successes and use our experience to improve? The answer is NOW! Allow yourself at least half an hour to consider the following points, which will enable you to make your plan of action for 2010 a lot more effective.

  • What were your three principal ambitions for this year? Write them down followed by the answers to the following:
  • How successful were you on a scale of 1 to 10?
  • What would have made the difference between the score you gave and a 10....or an 11?
  • How often did you monitor your progress? Would it have been helpful to have done this more often?
  • If your priorities changed throughout the year, did you adapt your goals to ensure they were still realistic and achievable?
  • Did you use all resources available to you? What or who else could you have used?
  • Take five minutes away from these questions to make a cup of tea, check your email or make some calls.

...go on, put the kettle on! Now, imagine the answers you have in front of you are not yours, but those of a colleague who has requested your help. They’ve asked for your opinion on each of the points and are in need of complete honesty to help them improve for the future. What would you say to them? 

  • Do you think the scores they gave were reasonable?  
  • If they say that they did not adapt during change, or they didn’t use all available resources – ask them why?  Was something holding them back? What obstacles prevented them from achieving each of these goals and how could they have overcome these?
  • In what way have you seen them progress and grow this year? What do you see as their main achievements?

Finally, I’d like you to raise your mug (you did make that tea, didn’t you?) and congratulate yourself on everything you achieved during such a testing year – here’s to even more success in 2010...CHEERS!! To find out more about hgcoaching please visit www.hgcoaching.wordpress.com, follow me on Twitter @hgcoaching or contact Holly at hollygordon@btinternet.com startupdonutbannerbutton728x90

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If you enjoy something – don’t go into business to do it

December 11, 2009 by Trevor John Lever

I set up my first business during the recession of 1990. At the time I was given some great advice, though initially I didn’t fully appreciate its value. I thought it might be useful, given the current economic climate, to pass this advice along…

“If you enjoy something and are good at it, don’t go into business to do it. Go into business so that you can do the thing you enjoy and are good at.”

It took me a while to figure out the gem of wisdom here. Excited as I was to be setting up my own business, and taking control of my own destiny; what was motivating me was that I would be doing something I enjoyed and felt I was good at. The problem with this is that it puts the “going into business” aspect of your new venture into second place. Whereas it should come first.

You may be a good web designer, or chiropractor, or recruitment consultant, or even helicopter pilot. But if you are not prepared to be a good business person, you best stay on someone else’s pay-roll. Or if no one is prepared to pay you to be a web designer, chiropractor etc keep these skills as a hobby.

You need to be thinking “I am going into business and will be a business person first.” A by-product of your business is that you get to do something that you enjoy. If you do not focus on being a business person first: areas such as cash-flow, sales, market research, administration etc. are likely to come second to the delivery of your product or service. And those wrong priorities can easily lead to business failure.

Now, I am sure that you are a good web designer, or chiropractor, or recruitment consultant, or even helicopter pilot – but what makes you think you are a good business person?

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Are you legal and decent?

December 08, 2009 by Chris Barling

Like every area of business these days, there’s lots of red tape and ecommerce has its own rules and regulations. Just remember, though, it’s up to you to comply with the law. Here are my tips to help you ensure your online store meets UK regulations.

1 VAT
If your annual revenue exceeds £68,000 you must be VAT registered. If you're below this threshold, you don't have to worry about charging VAT and it would actually be against the law to do so. There are some finer points to be aware of, too. For instance, if your products are a mixture of those requiring VAT to be charged, and those exempt from VAT, VAT charged on shipping should be in proportion. Make sure your ecommerce solution can handle all of the tax rules.

2 US import rules
The UK is part of the EU, obviously, so we’re bound by its rules. It’s not the same when handling US orders. The individual US states might want to charge tax on sales into their area, but it’s their responsibility to levy this tax. You don’t have to charge this “use tax”, which is between the buyer and the state where they live. As a UK business, you can sell into the US tax free – but you should make your customers aware that they may be charged tax on the goods when they’re imported.

3 EU Distance Selling Directive
Under this Directive, you must provide full contact details – including an address, phone number, email and company and VAT registration numbers – where applicable. Do it anyway – it helps to build trust.

The same Directive dictates that you must accept return of any items purchased within seven working days and failing to inform buyers of their rights has penalties. But why not make this a selling point?

4 Data Protection
You must register with the Information Commissioner’s Office if you hold data on people (eg customers). Registering takes some time and effort, but is inexpensive and fairly straight forward.

5 Email opt-in
If you want to email newsletters or offers to prospective customers, you must gain their consent in the form of a statement that the customers agree to receive communications. You must also give them an option to decline.

Emails involved in fulfilling orders or answering specific sales enquiries do not need this provision. When you send marketing messages there must be a free method of opting out each time you send an email. This itself can be by email. The regulations apply to communications with individuals, not businesses.

6 Disability legislation
Since 2004, by law, businesses have had to take “reasonable” steps to provide access to people with disabilities – and this includes your website. Ensure all images have alternate text tags, so visually impaired people can still navigate your site.

7 Libel on social media
Libel laws also apply to blogs, Twitter, Faceback, etc. Remember also that your words remain on record forever – so think before you type that competitor put-down.

8 PCI DSS
Protecting payment card data is crucial and the banks require compliance under the Payment Card Industry Data Security Standard (PCI DSS). Compliance is compulsory for anyone who accepts and stores debit/credit card details either on computer or on paper.
More information on PCI DSS can be found at https://www.pcisecuritystandards.org.

You can meet PCI DSS in one of two ways:

  • Use a payment service provider (PSP) such as PayPal, WorldPay or SellerDeck Payments (if you use my company’s shopping cart). Your customers and employees only ever enter card details into the site of the PSP. That way, the PSP does most of the worrying about compliance and you are left with some straight forward actions. This is the best option for small retailers.
  • Make your own infrastructure fully compliant. This is a difficult route and for the majority of smaller businesses, achieving proper compliance will probably not be practical or cost-effective. The total one-off cost is likely to exceed £45,000 plus ongoing fees.

9 3D Secure
3D Secure – known as “Verified by Visa” and “Mastercard SecureCode” – is a sort of online chip and PIN system. Online buyers are prompted to enter a password whenever they use their card. The password is sent directly to Visa or Mastercard and they approve the transaction (or decline). This is gradually becoming compulsory and you should consult your bank and PSP on how to comply.

10 Let the world know
Finally, assuming you are legal and decent, let the world know. Anything that adds to your credibility will help you online, so list all of the things that you have done under the heading “We comply with the following legal and tax regulations”.

If you are a start-up, these rules may seem to big a mountain to climb. But there are two things to remember. Firstly, do your best to comply. Secondly, if you’re correctly challenged, then immediately take corrective measures. With the exception of VAT transgressions, in most cases this will be enough to avoid business damage or prosecution.

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Lifting the lid on accountants’ fees

December 07, 2009 by Elaine Clark

Historically, accountants have charged large fees for preparing the accounts and completing the tax returns for businesses.

In these changing times are these high fees a thing of the past?

All businesses, regardless of size, must prepare accounts and submit a tax return to HMRC. The traditional view is that preparing these returns is a complex procedure resulting in sky-high accountancy fees.

However, two key factors have evolved over recent years that challenge this and as a result the fees charged by accountants should reduce dramatically.

Advances in technology

In all areas of life, there have been huge advances in technology over the past decade. At last the accounting profession is catching up.

Computer-based bookkeeping packages have become easily accessible to business owners at an ever-reducing cost and ever-increasing ease of use.

This means the quality and completeness of information made available to accountants at year-ends is constantly improving.

Coupled with this, accountants now use accounts production software that greatly simplifies the preparation of annual accounts and tax returns.

Logic would dictate that the evolution of technology would have led to a reduction in accountancy fees.

Increase in the number of small businesses

There are nearly five million businesses in the UK. Small, non-complex businesses account for 99.9 per cent of this number. In fact, the growth of small businesses is at its highest level since statistics were recorded.

The accounts and tax affairs of these businesses are simple. They do not demand many hours of tax advice. Most of the time is spent in what is generally known as compliance duties. For example, preparing the accounts, filing the tax return and making sure all deadlines are met.

The accountant’s fee should reflect the level and complexity of the work required.

The accounting profession is gradually waking up to the changes in technology and businesses over the past decade.

This is very good news for small businesses out there that should be able to benefit for dramatic reductions in their accounting fees. A great help in these tough times.

Elaine Clark, www.cheapaccounting.co.uk

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A tiny piece of technology could grow a massive business

December 04, 2009 by Mark Sinclair

The amount of free resources available to entrepreneurs is truly remarkable when compared to the business world of the 90s. The growing popularity of web apps – and in particular free web apps – is allowing small business owners to benefit from tools and technology which used to come with a hefty price tag. Some of the most useful web apps available today are those concerning search and networking. Regardless of your industry, finding quality leads or prospects is one of the most important elements in growing your business.

In this video, we’ve searched the internet for the top web apps around. These six businesses tell us how they’ve used web applications and online networking to get in touch with the right type of prospect for their business.

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Primary market research vs. Secondary market research: a comparative analysis

December 03, 2009 by Eric Brandenburg

Market research is an essential part of any business plan, whether a fledgling business or a multinational organisation. Knowing that there is a sustainable market for your product and understanding what your audience expects from you is vital to a successful business launch. Market research can generally be split into two categories; primary and secondary, and during this article I will explain both and discuss their respective merits and appropriate uses.

Secondary Research

Secondary research makes use of existing data from whatever sources are available. There are government censuses, Mintel surveys, and many private market research agencies that allow access to their data; some of it for free. It can be hugely advantageous, especially as a place to begin. Secondary research more often than not, proves to be a solid base on which to develop your own primary research. It plays the same role as research in general does to your product launch, and should be seen as just as vital. Also, this is of course far cheaper and generally quicker than creating your own research from scratch.

The negatives

The other side of that coin is that you have neither picked the panel to suit your exact needs, nor the questions. It is feasible that you can find some research somewhere that corresponds to what you are trying to achieve but it will almost certainly require some tweaking, and will not necessarily be the people you wish to interrogate; the use of qualitative research designed by someone else will almost certainly make the target specialised away from your goals. Another main issue with secondary research is that by the time it reaches you it’s often outdated; markets change so quickly in business that the only way to be truly current is through new research. This is not to rubbish the quality of secondary research.

Primary Research

Primary research is, essentially, the creation of your own research, whether a question that you ask to your friends and family or a survey put together alongside an agency and administered to a wide panel. Primary research will instantly let you feel more in control of your project; and that is the exact position you will find yourself in. You choose the questions and select your panel through qualitative research, allowing you detailed responses from individuals. You decide how, when and where your research is administered. You can ensure that your research is focussed: the number of participants and their backgrounds, the number and nature of the questions, the amount of time that your survey is available. This is the most accurate way to research a market sector that is specific to you and your product.

The down side

It is of course, more expensive, whether financially or on your time. If performing primary research alone it will take a lot of time, refining and will need some experience in producing quality questionnaires. It will also take time for your questionnaire to be completed if you don’t have direct access to a ready panel. Most of this can be avoided by using an agency, but at a cost higher than performing your research alone.

So what’s the best option?

Neither type of research will take you to your goal alone; however, a combination of the two will give you all the information you need. Using primary research alone, without first seeing what has or has not worked for other companies and possibly missing out on important data from research that you couldn’t afford to perform yourself, is likely to lead to irrelevant questions or missed opportunities. At the same time, relying solely on secondary research is likely to leave you with answers that are vague or inappropriate to your specific audience. The two compliment each other well, and when used in conjunction will give you a well rounded and accurate portrayal of the needs and opinions of your market sector.

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The simple life – three ways to gain success on the web

December 01, 2009 by Mark Sinclair

Start up business owners absolutely can’t ignore the opportunities that are available online to market their small business. As great an opportunity as there is, it’s also a pretty daunting task for a new business – especially if you’re not an expert in getting attention on the web. The good news is, keeping it simple is one of the best ways you can ensure that your website is ticking all of the boxes and serving the purpose it needs to for potential customers or business partners.

Stefan Tornquist, Research Director of Marketing Sherpa, talks about improving your search rankings organically through relevant website content. As a small business owner, how easy do you find it to write copy and articles for your business? Is it something you can do yourself, or do you prefer to outsource this job?

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