When you get a new idea for a business to start up, it can be hard to contain your excitement.
Conducting market research and gaining an understanding of your competition is absolutely essential to good business start up.
And identifying those who are already doing what you want to do — so you can learn from them — can be incredibly helpful.
So how do you go about learning and gathering information about established businesses in your industry?
As owner of a retail business that is open to the public, I discovered quickly that not all of my visitors are actual customers coming to buy my products.
I’d like to tell you a true story that happened just a few years after we started our handmade soap business.
We’d moved our retail shop out of our home to a location off the Blue Ridge Parkway, and some of our once-a-year tourist customers were just finding that out when they drove up our mountain driveway.
So when I first heard our property perimeter alarms go off, I didn’t think much of it.
I expected the customer would see the prominent sign we posted, stating our shop was now located three miles away. We’d also built a weather protected box with maps to the new store for those not familiar with the area.
I knew how long it would take for a car to drive in, for visitors to read our sign and get their map, turn around and drive out — at which time I would hear the perimeter alarm sound once more.
But the alarm didn’t go off a second time.
Which usually meant the old shop doorbell was about to ring.
Some customers were certain we must still have some soap for sale inside. Occasionally I actually had to bring them inside the former shop to prove to them that the soap and retail displays were gone, before they were willing to drive to the new location.
For these more stubborn customers, we placed additional ‘CLOSED’ signs on the former shop door entrance, again telling them where to find our new shop up the road three miles, and providing a stack of maps available to take with them.
Those efforts still didn’t always help. We’d found customers coming into our home via the laundry room as well as the basement saying the shop sign had a closed sign on it and they couldn’t get in through that door!
But on this day, the old shop door bell still didn’t ring.
So, – where were these customers? And what were they doing?
No cars were in the customer parking area, but a car I didn’t recognize was parked down next to The Shed where we make our soaps. I could see no one in the car, and no one walking around the Shed.
Which indicated that someone was INSIDE our production area.
At the entrance to The Shed we had many polite signs posted like ‘No public beyond this point’ to keep visitors outside the production area because of the sodium hydroxide (lye) used in the soapmaking process. Lye is unsafe to handle without special protective gear (one grain in your eye can blind you) and presents a legal liability if not properly shielded from easy access (because it can be used in methamphetamine production).
My car was in the shop for repairs, and my husband Tim was running our retail shop that day. I realized the empty driveway would have looked like no one was home.
As I walked down to The Shed, I wrestled with the knowing that someone was on our property, inside our production area despite all the signs, and who never attempted to ring the door bell to talk to me or ask permission to explore our Shed.
What kind of person would do that?
I walked as quietly as I could, hoping I would find the trespasser doing whatever they came to do.
And when I walked inside, I found a middle aged woman rummaging through the fragrance and essential oils we used to scent our soaps: picking up the precious amber bottles to read the names of the scents we used in our products, and the suppliers we bought them from.
“Hello,” I said, and watched the intruder nearly drop the bottle she was holding.
“You scared me,” she said accusingly. “I didn’t think anyone was home.”
“Our shop is three miles away if you’d like to buy some soap,” I said. “I can give you a map.”
“No,” she said, “I just wanted to see what you do here. My husband said I should consider doing the same thing you are.”
“So, you’re a soapmaker?” I asked.
“I’ve made a few bars,” she said, “but soap takes so long to make. I thought I would take a look at how you have things set up here in case it helps me figure out how to do it.”
Ah, a wannabe, I thought to myself. We certainly get enough of them visiting the shop.
But I’d never had one come onto our property without permission, enter our production area believing she had the right to do that: to steal from us whatever she could, to learn about how we set up our production area, or who we buy our raw materials from. To simply take from us much of what we consider to be our competitive edge.
I glanced at our recipe notebook stashed under the main production table, the book that held all the unique recipes we’d developed over years, and felt relief that it had not been moved or opened.
That notebook would never be left in the production area again.
I look back on that day and wish I’d acted differently. I didn’t confront her or demand she leave and never return. I remember going into ‘nice’ mode, providing vague answers to her nonstop questions, some beginner and some not, as I tried to move her OUT of the Shed and limit our loss of proprietary information.
I asked her if she had a business name yet, and she told me the one she was thinking about, the one she thought it ‘probably’ would be.
Finally, I got our intruder into her car and on her way.
Three days later, when setting up our booth at an annual art & craft show in an adjoining town, I looked across the road from us and there was a booth with a big banner on which the business name the woman was supposedly ‘thinking about’ was printed. And there she was, putting out hundreds of soap bars for sale.
Since the deadline for even applying to the craft show was seven months earlier, and at the time (2003) it took several weeks for banners to be printed and shipped, it was obvious my ‘visitor’ had been planning on selling her soap at the show for a very, very long time.
And at that moment, I realized that I’d been had.
If an entrepreneur has to steal ideas from others at the very beginning, during the business start up phase, they rarely possess the creativity needed to problem solve as their business actually gets off the ground or needs to grow.
Part Two of this post will address what market research is really all about, and how to learn from your competitors in ethical ways.