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Market intelligence a vital tool for small businesses

AS ECONOMIC conditions tighten, small business owners are being urged to gather as much market intelligence as possible.

Small Business Development Corporation managing director George Etrelezis said market intelligence was more important today than ever.

“Small business operators need as much information as possible about their competitors and the marketplace at their disposal to effectively run their business,” he said.

As Sun Tsu wrote in The Art of War: “If you know the enemy and know yourself, you need not fear the result of a hundred battles”.

But many small businesses steer clear of seeking market research because they feel it will be too expensive.

Market Research Society of Australia WA chair Penny Coase admits cost is a big disincentive for many small business owners.

“To do research properly you need to talk to a few people. That can be expensive,” Ms Coase said.

“But the cost of research is normally only a fraction of the cost of what the business is planning to do, be it a planned new product or an advertising campaign.

“The cost of a failed venture is often several times what the research would have cost that could have told the business the venture was a bad idea.

“The trouble is, by the time someone has gotten to the research stage, it is often hard to let the idea go.”

Ms Coase said there were ways small businesses could undertake their research cheaply.

“They can conduct surveys over the Internet,” she said.

“If these surveys are managed properly, they can prove quite economical.”

Ms Coase said companies considering Internet surveys should only send them to their existing customers – those with whom they already have a relationship. Sending out bulk surveys via email can prove counterproductive. It is similar to receiving junkmail and will probably be treated the same way.

Ms Coase said there was a lot of second-hand information small businesses could access, such as Internet reports.

“These can help tell if an idea is viable or not,” she said.

The Government Bulletin Board can also prove a valuable resource for small businesses.

It publishes award contracts of $10,000 or more.

Mr Etrelezis said small businesses could use the bulletin board to identify prices and services relevant to their business.

“They can even create business alliances with companies being awarded contracts to explore subcontracting opportunities,” he said.

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