Methodology into preparing a business idea Essay

The aim of my project is to research a potential business venture to see if it would be feasible to open a sandwich shop situated at the bottom of the Station Road facing Wallsend Forum. In the beginning I intend for my sandwich shop to be a small, local business which I will eventually expand on if funds permit it. My business is being situated in Wallsend for many reasons. Firstly, I am from the area and know first hand that similar businesses in the area are extremely successful and I believe that by improving some of the more negative aspects of rival business I can make a success of the business. Secondly, the rent on a premises is a lot more reasonable in Wallsend, alternatively I could have chosen Newcastle City Centre, however after looking into the cost of renting an outlet I finally decided on Wallsend, as a property in Newcastle would cost a minimum of 5 times of what I could have in Wallsend, there would be a lot more business in Newcastle, but I could not afford to rent such an expensive property this early into the venture, however, in future it is something I may consider. I have chosen this area because it has a high population of 213,983, it is also linked to many main roads which has a huge amount of traffic each day which I feel will benefit my business. Wallsend also has a bus terminal and has 3 metro stations within walking distance, I believe this will greatly contribute to my business and generate a healthy custom. I will be able to research this by using methods such as questionnaires, surveys and conducting primary and secondary research into similar businesses in the area to compare them to get a good indication of costs and such. To see if my business venture will be successful I will need to conduct various types of primary and secondary research. This is so I can gather information about my type of business and estimate demand and such. All of this collated information will give me an indication of whether my business will be a success. I will be conducting both primary and secondary research as both of them pose benefits to my market research. Primary research will be beneficial because I can aim my questions specifically at my research objectives, therefore I will only obtain necessary information, there is no risk of having outdated information because all of the information will be current, I could also give my potential customers a preview of what type of products they can expect from my business by providing samples. However, there are also negative aspects of using primary research, for example, they can be very expensive and time consuming, organising samples and getting people to help survey will be costly and also time consuming. In addition, there is always a risk of interviewer and questionnaire bias, questions may be worded so it directs respondents to choose a specific answer, which will make the information collected invalid. Secondary research also has its advantages, it is often inexpensive and can be obtained for free, also if you have enough information from various similar businesses it can give a wide overview of the general market, and it is often based on large samples which is extremely beneficial if you cannot conduct a large enough survey yourself, it also often includes official sales figures. Similar to primary research, it also has its drawbacks, the data may be outdated which makes it irrelevant to the current day market, it is never specific to your business and could only contain a small amount of relevant information, if the information required does require a fee, then it can be very expensive however it will report on different kinds of market, including your own, again only providing a small amount of information relevant to your business. I could conduct my primary research in a variety of ways, I could use a postal survey, where I would deliver a survey through the post and expect the respondents to reply, this can be advantageous because it saves a lot of time and money, delivering a postal survey around the area of my business wouldn’t take as long as some other methods and I could do it myself rather than having to employ people to help. However, the amount of surveys I would receive back would be a small percentage of what I had handed out, which would render the process pointless, however if I stated that respondents would receive a free gift the response would be higher. I could conduct a face to face survey in which I would ask questions on the streets of Wallsend. The benefits of this would be that it would raise awareness of my business and create a curiosity amongst the respondents which is already a form of unintentional promotion, and also let my potential customers get to know information about the business before it opens, in addition, the data is quite simple to analyse and it wouldn’t take long to compile the data. On the other hand, this would be quite time consuming as a lot of people refuse to take part in street surveys, also I would need to employ others to help because I would not be capable of conducting a large enough survey to base any decisions on. Finally I could create a focus group, in which I ask groups of 6-8 consumers questions about their expectations of a sandwich shop and analyse their answers. This would be extremely informative and will give the option of interviewing 6-8 people all at the same time, which saves a lot of time. In contrast, it would be very difficult to organise a group of 6-8 people to discuss products and services and I would perhaps have to reward them for their participation, moreover, if my respondents are in a group they may not air their own opinion and just agree with the general consensus of the group which would make my data inaccurate. I have decided to conduct a face to face survey as I feel it would be the most beneficial to my business. Taking into account that I am a relatively small local business opening in an area which has similar businesses I think it would be extremely beneficial to create an awareness of the sandwich shop in advance of the opening. Moreover, the data can be analysed quickly and almost effortlessly. I have chosen this method over the other 2 I have previously mentioned because I feel it would cost the least, and in the first year of my business, costs are paramount. I need to find out potential customers expectations of a sandwich shop and what people expect to pay and what services they think are essential to the business being a success. My questionnaire will take place in Wallsend town centre, as that is where my business is based. When deciding who I want to take my questionnaire I had to look at sampling, I could conduct a random sample survey in which I question people of all ages, sizes, classes and so forth to ensure that I have covered every possible type of person that could be a potential customer, which will give me a representative conclusion based on the opinion of a wide range of different people rather than targeting a specific type. The disadvantage of this is that it can be very expensive and time consuming to pick people at complete random, for example from a telephone book. It can also be a very slow process, depending on the sample size. Instead of using this method I could use a quota sample, which in essence is interviewing anyone and everyone that comes along, similarly to random sampling in that age, size, classes etc, are irrelevant. This sampling method is extremely cheap and effective way of sampling because I can conduct this when and where I like, it is used by most businesses. The only drawback of this method is that your questionnaire may require a specific type of person to survey (men for sportswear for example) so if that were the case this method would be useless. I have decided to use quota sampling when conducting my survey because it is very cheap and flexible in terms of time consumption, which is a far more suitable solution than random sampling in where it would require a lot more work, manpower and time. In addition, my survey is applicable to everyone, as it is a service that everyone, regardless of characteristics, could use at some point.