Over the holidays I had occasion to spend time with two friends, both of whom wanted to open restaurants; one, to try an entirely new concept, and the other to resurrect a past success.
When I asked about the market research they had done, the first friend with the new idea said that they had checked with colleagues and spoken to very wealthy and influential people in their community who “thought it was a great idea!” My other friend, who had had a successful enterprise many years ago, believed that customers of that establishment were just slavering to see it open again.
They might both be right.
However, given the difficulties inherent in developing and maintaining a successful restaurant enterprise, and the costs in time, energy, dollars and relationships, can they afford to be wrong?
While neither friend was looking for business advice or guidance, being in the business of both I couldn’t help but throw out a word of caution. As the various costs of business start up increase, the need to develop solid market research as the basis for any business enterprise becomes more and more important. The ‘Build It and They Will Come’ philosophy can be very seductive, but it is, at bottom, a somewhat self-indulgent and often dangerous approach to business development.
‘Find Out What They Want/Need and Then Build It’ is the current strategic criteria for business success. What my friends should be doing, and I certainly hope they do, would be to take steps to do some formal market research, either on their own or with professional help, to truly measure the market response to both old and new concepts.
Their research should include all of the demographic elements, geography, age, income bracket, yearly dine-out expenditures, profession, gender, food preferences, etc. and should strive to be wide ranging and valid in testing the larger population.
Before you can make any decision regarding product or service, make sure you know that the market is there, what the market desires, and how to reach the market for best results, both at start up and to maintain sufficient business to make your enterprise a go in the long term.