Before you move on your next great idea, do some research to see where you stand in the market.
How can market research can help small businesses?
The rich get richer, is not just a saying. They know what the average person doesn’t and they usually pass it on to their future generations. Knowledge truly is power. No matter what industry you plant to enter, it pays to understand your target market. The tactic of using market research is quite costly and usually reserved just for big businesses. They often have teams dedicated to this part of their research and development activity. It usually includes interviewing customers, conducting surveys, polling focus groups and analyzing buying habits. This can be expensive or time consuming to undertake but the payoff is worth it.
Should a start up use market research?
Absolutely! once you have defined your product or service you need to be sure it is a viable idea. Skipping this step can lead to a failed business and loss of all the time and resources spent trying to get it off the ground. It is important to concentrate your focus on the questions that will have the greatest impact your business. Who are your customers, what else do they buy in your area of service, and how much do they pay are all great questions to begin your search. Once your questions are clearly defined you can choose the best method for obtaining the answers. The three most common ways to conduct with a focus group, online research or a survey. Getting quality information you can shape your business strategy with is the goal.
What are the limits of market research?
There is no crystal ball that perfectly predict the future or if your business will succeed. Conducting market research will give you an advantage but has the following limitations:
- A small sample of your potential customers cannot represent the whole market
- Some people lie on surveys
- Available research might not factor in new trends
- How your business behaves in the market will change the outcome
This is not to discount the value of market research, but you can’t use the findings like they are a guarantee for success. There are other factors that should be considered. If you have experience in your field then you can also use that as a guide.
Words of Wisdom
Learning about the demand for your business is worth it in the long run. If you are going to build a business plan you need to identify your customers and know what they are willing to pay and how they like to shop. There is no silver bullet for guaranteed success, but research and planning will never hurt.
To make the best use of market research, here are some key points to remember:
- Start early – before you go into a new market
- Save money – do what your can yourself
- Use existing research – reports and databases online
- Listen to your customers – look at online comments
- Use the cloud and big data – visit Google Trends
