Starting Up: Market Research
Do you have an idea about how to create a positive change in your community? Could your idea become a social enterprise? In this blog series, we will talk about the most important things to think about if you want to start a social enterprise.
If you have an idea for a social enterprise, it’s likely that you were inspired by an experience in your own life or by observing a social or environmental issue in your local community. You are confident that your idea will make a difference, but like any other business, it’s important that you gather evidence to make sure you are on the right track. This evidence will help you gauge if your idea will be socially or environmentally beneficial and commercially successful.
Social enterprise is all about marrying the commercial and the social or environmental.
Anna Lynch, Firstport Business Advisor
Your idea has to have a Social Mission and Impact to be a social enterprise, however it also has to be commercially viable, like a mainstream business, for it to be sustainable. The more profit you can make, the more impact you can create.
Customers vs. Beneficiaries
It is important to understand the difference between customers and beneficiaries when developing a social enterprise idea.
- Customer: someone who purchases a product or service from your social enterprise.
- Beneficiary: someone or something that benefits from or is supported by your social enterprise.
For example, your idea might be to sell t-shirts and to use the profits to run workshops for young people. Your customers are the people who buy your t-shirts, and your beneficiaries are the young people who attend your workshops.
In many cases your business plan will mean that the difference between customers and beneficiaries is not as separate as this. The important thing is that you can identify each group.
Sometimes there is a misconception that social enterprises can only operate within their social mission. But diversifying income streams can be a useful method for increasing your impact.
Market Research
Market research is about evidencing the need for your product or service. You want to find out if there are any other businesses or social enterprises doing what you want to do. It’s good to learn from what is already out there about what works and doesn’t work. It’s worth thinking:
- Is there a need/demand for my product or service?
- Is anyone else doing the same or similar?
- If no one else is, why not?
By asking questions like this, either in surveys or interviews, or looking at existing information and figures, you are gathering evidence. This is information from unbiased sources (people who aren’t invested in your idea – so not family or friends) that helps you develop a better understanding of the subject you are researching. In this case, whether there is a gap in the market that you can fill.
Once you have evidence supporting your idea, you can begin to think about who your customers will be. This will allow you to advertise to the appropriate people, and even engage in some user research, to learn what it is that the people who are buying your product or service really want. This could mean running a few focus groups with prospective customers to discuss your product/service, sending out a survey or conducting a pilot to gather feedback.
Beneficiary Analysis
As you are looking to start a social enterprise, you must think about beneficiaries as well as customers. Having a clear social mission and impact will help you to identify who your beneficiary group is, so you can do an analysis of need. This means specifically looking at the group or environmental factor you are trying to support or benefit to make sure that there really is a need for your social enterprise. You might think that this is obvious, but it’s important to have evidence to support your perspective.
If you are going to be tackling a social rather than environmental issue, you could try speaking directly to the people who will be your beneficiaries. This will allow you to shape your impact to fit the specific needs of the people you want to help, making sure it is as beneficial as it can be.
To find out more, check out the videos, blogs and market research support resources in our Resources Hub. And, if you have found this post helpful, why not sign up to our newsletter by filling out your details at the bottom of this page, to find out when a new blog post goes live.
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