Why does a business person need to understand research, and how is it used in business?

Every day business people make assumptions that are generally based on past experiences or feelings. The ability to research is therefore necessary to validate assumptions.

The most common assumption that business people make is: "The customer will like the product because I do." This is an assumption that must be tested prior to significant investment. For example, a yo-yo manufacturer may assume that his factory should make brown yo-yos because her/his favorite color is brown. His target audience (being a different age with different personal experiences) may prefer bright blue. If the yo-yo manufacturer does not research her/his target audience (test her/his assumption), s/he could produce thousands of yo-yos that nobody buys. If, on the other hand, the business person tested her/his assumption, s/he would reduce waste and increase efficiency.

Other common assumptions business people make are:

• More customers = more profit
• Increasing the price = fewer customers
• Increased advertising = more customers
• Higher fee = better service
• etc.

All of the above are common assumptions that are often incorrect. In all of the above cases, business people should consider conducting and examining research in order to make informed accurate decisions.

The cost of research should always be compared with the benefit the consequential decision will provide. In most cases, research can be done cheaply by analyzing web analytics, company data, publicly available government data, etc. In such cases, a business person can benefit from being able to analyze, understand, and apply research to make any decision.