One of the common reasons why businesses fail is due to venturing into business ventures without carrying out market surveys. More than 95% of start-ups in the country simply deep dive into projects without scientific evidence of the existence of a market.

In most cases, entrepreneurs base investment decisions based on what is trending.What are other people doing? Ndezvipi zvirikupa mari? Are Covid-19 masks the in thing? Then plunge in without enough information.

So why do entrepreneurs avoid detailed market researches?

Little appreciation of the concept and associated benefits

Generally considered an expensive process

No developed SME Experts industry, so few market researchers available

To those knowledgeable-the process can be time consuming

Lets take you back to a few years—do you still remember the sack potato which once took the country by storm? How many people got burnt?

Market researches should have pointed out the grey area of wild animals and related legal restrictions. Of course pointing this out when many people are venturing and benefiting is a futile exercise.  

In this article, we hope to assist you with conducting market researches on your own but our advice is always for you to get experts advice.

Market Existence: Is there a market for the products or services you intend to bring to the market? Is there a gap sufficient enough for you to invest funds and get a reasonable return? If there is no market, then you better hold on to your resources.

Size of the market: If for instance you have established that there is a market, what is the size of the market? This is where you need scientific evidence rather than guess work. You need a helicopter view of the whole industry. For instance The Herald reports today(24 July 2020) that Zimbabwe has a housing backlog of 1.4 million people and it will take between 15-20 years to clear the backlog. If it is agriculture, then responsible ministries such in charge of agriculture publishes regularly information on market sizes and gaps-Output forecasts and actual figures. The donor community also chips in with estimates. ZIMTRADE helps with foreign markets market researches.

So we have an overview of market sizes on a national level but this is not enough—you need to zero  in on your area of interest. For instance the supply of soap to Ruwa or Norton. How many people live in your area?

What are the changes in the market? Business going online or new suburbs being built? New shops coming up?

Active Market Players Analysis : In your area, who are the active suppliers? In the case of Ruwa, we may find that many people buy soap from local shops—Spar and TM and other tuckshops. Are they meeting the demand? Are customers satisfied with their products—quality, prices and other conveniences. Is there a gap to supply own soap? For instance if a bar of soap is being sold for US$1—can you also manufacture and sell at the same price or even lower?

What are the changes in terms of economic environment? Disposable income changes and preference for lower priced products? Can you tap into online business opportunities? For those used to buy from the CBD, how does the lockdown restrictions affect buying behaviour?

Conducting the research

There are key stakeholders involved in conducting a market research and they are;

The buyers: You need input from the people who will buy your products and this process is no stroll in the park. Your sample size should be big enough for instance if a suburb has 100,000, then reaching out to 10 people is not good enough but a few hundreds can help but this can be an expensive process. Solicit their feedback, what are their pain points in buying existing products? Can they buy your products? Having samples of the products can help. Document information collected.

The suppliers: Who are the key suppliers in your industry? You may obtain crucial information of prices, availability of products and changes in their business. Document information collected.

The competitors: Who are the major competitors in the industry? What are their business models? Are they expanding or contracting? What are the challenges they are facing and how are they dealing with them? What is the level of competition in the industry? Document key insights for decision making.

Regulatory agencies: What are the regulatory forces in the country? For instance price controls? We witnessed the ban of kombis—what were the public statements issued in the run up to the ban? What are the priorities of the government? Is your business legal? What anticipated legal challenges can come your way? Refer to our VUCAH Skills articles.Just like the quail birds, you risk investing into a project that can later one be banned and adversely impacting your operations. Highly unlikely to have an opportunity to interview regulatory agencies so your source of information likely to be search engines and general knowledge.

Boots on the ground approach

Unfortunately you cannot conduct researches without getting your feet on the ground. You need time on the ground observing events or carrying our researches. Structure your research so that you have desktop work as well as on the ground. Engage student interns in cases where you cannot afford to engage market research consultants.

Report Compilation and Review

If you were actively involved in your market research, then you are going to need a different pair of eyes for review. It’s difficult to critique a document you would have been involved in drafting. You need someone who will review the adequacy of your report –the independent eye that picks out grey areas you missed out and provide an objective and balanced assessment.

Launching your product

Often times, start-ups prepare projections that span more than 6 months but is this realistic given the dynamic nature of the environment?

Instead of investing all of your funds based on market research evidence—rather choose to test the market with a few product samples for learning purposes. Investing funds for learning purposes? It’s a tough decision as this means resources usage but its important rather than proceeding full throttle. Read more about the lean method.

On a parting shot, this information is just elementary stuff but gives you an overview of how to carry out your own market research. This is an area largely ignored by many start-ups! Even those who can afford to engage experts choose not to but with disastrous consequences!

Do watch out for examples of market researches for our subscribed members.

Brilliant business plans, a lot of enthusiasm, you have attended many seminars, followed role models, read plenty of books and you have mastered the basics—you look forward to launching a successful business project. Good luck to you, thorough researches done—you can do it!

In soccer the coaches would also have followed the same approach. A lot of practice, watched videos of competitors, done self analysis—got psychologists to psyche you up. Confidence full to the brim—bring it on!

Come match day, you enter the pitch and as soon as the referee whistle goes off, its game on!

Then you find the conditions totally different from what you had been taught and practised for.You concede many goals than targeted, you make life difficult for you in the second half. How can you reverse the 4-0 score line?

In entrepreneurship, you learn that the economic environment is not as predicted. New statutory instruments come from nowhere, Covid-19 comes, inflation conspires to make your life difficult. All the business plans and researches rendered useless.

Meanwhile you have sunk a lot of capital into your project, some employees involved in fraudulent activities, some debtors not paying up, currency changes and money stuck in banks or Ecocash banned.

Hold on, all of these events did not appear in your business plans! Like in soccer, you have a 4-0 loss and you are considering quitting to save the little capital that still exist.

Welcome to the second half

Your coach has been studying the opponents, their strengths and weaknesses. Analysing too your own performance vs the opponents and coming up with a remedial plan to overturn the first half losses and record a draw or a win!

For entrepreneurs, there is no coach who was observing your performance and if you do not pause and self reflect then you are headed in the familiar direction travelled by 95% of entrepreneurs—doom!

In soccer teams that finish last get relegated and we can track all the teams that got relegated across the world. The statistics are easy to get…

In the Zimbabwean context, statistics are hard to come by and the absence of the statistics mean thousands to millions of people keep falling into the same trap.

Even when we follow popular entrepreneurs in the country. We only read of successful case studies but how they made losses in the first half and then miraculously survived in the second half to win the match is classified information!

Some of the first half experiences are so embarrassing that many are not comfortable to share them. The education system taught us to be proud of success and be embarrassed by failures and this extends to the business sector.

How to survive the second half

• Complete the match, do not flee due to adverse performance in the first half.
• Bruised, beaten, angry—seek half time expertise. Those who have played the match before—seasoned coaches. They will assist to point areas of weakness and strengths. They will analyse the industry too and other contributing factors. Together you will come up with a plan that also involves working on your deflated ego.
• Draft a second half business plan: Chances of your first business plan failing are more than 90% especially for first timers. Yes its well researched, Yes the same business plan has worked perfectly well for others but that business plan is bound to fail in spectacular fashion too.
• It’s a team sport: Serena Williams only has a team of experts behind her but she performs on the tennis court alone against competitors. Entrepreneurship is a team effort and not golf, boxing, motorsport or chess. You need a team for various roles (Financial Management, Strategic Management, Marketing, Risk Management, Business Management and more)
• The founder can have the passion to succeed but recruiting a competent team that shares the same vision is an almost impossible task in the Zimbabwean context. Refer to those who have operated kombis where in most cases the drivers and assistants have their own selfish objectives. How do you recruit and work with a team that is interested in starting their own businesses using your resources? Your business plan is not going to adequately cover this agency problem—you will have to experience it to appreciate the complexities. The biggest risk is seasoned employees working for a first timer!
• Don’t invest 100% capital in the first half instead craft your business plan such that its creates more cashflows for reinvestment and therefore adding up to your initial targeted capital. Do not invest too much when you entrepreneurship resume is at zero. This is akin to a coach using all substitute players in the first half.
• Success is anchored on experience (80% negative) and (20% positive). You know where you have lost money and how and you avoid making similar mistakes. You now know of events that lead to a statutory instrument being formulated and introduced. You know the type of employees to avoid, your own weaknesses and strengths too.

How about people who are employed and they resign or are retrenched and enter the entrepreneurship sector? You may have been a CEO or Director with a lot of perks and associated prestige and society expects you to continue living at the same level. You cannot all of a sudden be seen getting your hands dirty working at Siyaso.

Unfortunately entrepreneurship starts from the bottom, if you are entering the mealie meal production then you need experience of being a mugaisi. If you own trucks, then you need to sometimes drive the trucks. Starting a soap making business? Then you need to know how to make the soaps yourself. Because of self esteem, employed professionals just want to transfer their positions to the entrepreneurship sector with disastrous consequences.

Once those below you know that the founder knows very little about the nitty gritties, then they will craft strategies to start their own companies within your company.

So get experience—negative and positive and win the match in the second half.