Planning, Startups, Stories


Tim Berry on business planning, starting and growing your business, and having a life in the meantime.

Business Plan Market Research and the Fresh Look

The Artist

The artist takes a fresh look at the scene every time paints it. How many times as this man seen the banks of the Seine? It doesn’t matter, because he takes the fresh look every time.  The business needs to take a fresh look at its market and its strategic situation at least once a year.

Back in the 1970s when I was a foreign correspondent living in Mexico City, I dealt frequently with an American diplomat who provided information about Mexico’s increasing oil exports, which were a big story back then. We had lunch about once a month. He became a friend.

The Fresh Look

Then one day he told me he was being transferred to another post because he had been in Mexico too long. “What? but you’ve only been here for three years,” I said. I was disappointed for two reasons. “You’ve barely learned the good restaurants!” He explained to me that the U.S. foreign service moved people about every three years on purpose. “Otherwise we think we know everything and we stop questioning assumptions,” he said, “that’s dangerous.”

I remember that day still because I’ve seen the same phenomenon so many times in the years since, in business. We — business owners and operators — are so obviously likely to fall into the same trap. Our business landscape is constantly changing, no matter what business we’re in, but we keep forgetting the fresh look. “We tried that and it didn’t work” is a terrible answer to a suggestion when a few years have gone by.  What didn’t work in 2000 might be just what your business needs right now. But you think you don’t have to try again what didn’t work five years ago.

Not Necessarily Business Plan Market Research

For the record, I disagree with so many experts who insist on detailed and thorough business plan market research for every plan. I vote for a lean business plan that includes only what you are going to use. And a lot of us know the market already, so we don’t have time, resources, or budget to do market research for our normal planning process. I make this point here in my latest book on Lean Business Planning.

However, I do also suggest taking the “fresh look” at the market at least once a year.  Existing businesses that want to grow too often skip the part of business planning that requires looking well at your market, why people buy, who competes against you, what else you might do, what your customers think about you. Think of the artist squinting to get a better view of the landscape. Step back from the business and take a new look.  Use the standard Know Your Market techniques and content, just applying it to your business, not a new opportunity.

It’s about your now and future customers

Talking to customers — well, listening to customers, actually — is particularly important. Don’t ever assume you know what your customers think about your company. Things change. If you don’t poll your customers regularly, do it at least once a year as part of the fresh look.  As an owner, you should listen to at least a few of your customers at least once a year. It’s a good exercise.

For creativity’s sake, think about revising your market segmentation, creating a new segmentation. If for example you’ve divided by size of business, divide by region or type of business or type of decision process. Aim for strategic segmentation.

Remember to stress benefits. Review what benefits your customers receive when they buy with your, and follow those benefits into a new view of your market.

Question all your assumptions. What has always been true may not be true anymore. That’s what I call the fresh look.

 

 

  • Guy Francis Dennis

    Tim: I’ve downloaded the latest book, but I don’t think I’ve read it. I have written my plan in a great deal of depth, because I need a grant to get started. An early part of my business is to write plans for other small businesses. I remember from the tech bust in the 90’s that a part of it was that many startups had no plans. I don’t know if I should try to convince new businesses in this poor climate to shrink from in-depth plans?

    • Guy: I get it, the including more content for applying for grants makes perfect sense to me too. Form follows function, and all that. Re your other comment, on use for all businesses, I do for the lean plan with the understanding that it stays lean because you still need the bones and structure of strategy, tactics, etc. … but the in-depth depends on context and actual use case, can be a waste of time if we’re not careful. Thanks for the addition!