Market research is a very significant tool for a person who wants to launch a business or grow business. It involves scientifically-led studies to collect necessary market information, empowering entrepreneurs to take appropriate commercial decisions.
Unfortunately, study shows market research is a subject which is least taken seriously by startup entrepreneurs. It is in fact, a must stage in the business start-up process but many entrepreneurs don’t do it – not least because of the supposed cost. Market research determines the feasibility of a project and it’s a way to adopt a business’ strategy.
Read: Low-Cost Ways To Promote Your Business
5 Steps to Remember While Conducting Market Research for Small Business Owners
1. Check your Budget
Small business owners generally start and run their business on a shoestring budget. Check your finances and then plan your market research plan.
2. Use Free Online Resources
There are plenty of online resources available on the internet in every possible industry in most countries. If you are from the United States, you can use the official site of SBA to help small business owners with market-related information. You can also take help from Google Trends, Google consumer surveys to understand what people are searching and their demands.
3. Check Forum Sites
Use sites like Quora, Reddit, and other popular forums and check the opinions of people. You can also put a question there and see how the readers are responding.
4. Conduct Small Surveys
As a small business owner, you don’t need the minefields of information. Just create a small questionnaire with some basic questions like and share with people in your locality. Questions can be like what products they are using, are they satisfied, what extra benefits they would like to have, is price a major factor in buying products, etc. If you have the budget, you can assign a market research agency to do the job.
5. Take Help from Existing Research
Take some time off and find out if any researches similar to your product or service has been done already. Magazines, industry review articles come in handy sometimes. If you can afford, source genuine market feasibility reports from reputed organization.
Why Market Research is Used in Business
It’s important to carry out market research in order to:
- Finalize an idea
- Make the project credible(communication, pricing policy, products range…)
- Organize properly the setting-up approach
- Present more credible facts before financial partners and others
Online research has revolutionized market research, providing both opportunities and challenges to researchers and research users. Online market research has grown rapidly in recent years as a key form of data collection for primary research activities.
What are the Benefits Of Market Research
Online market research offers both large and small research focussed organizations the chance to eliminate the costs involved with face-to-face, postal, online and telephone data collection.
Why A Business Owner Should Opt For Market Research:
The most important factor of business is to find your customer niche. If you are launching your product, you need to identify to whom you are targeting. Who is going to use your product/service? For an existing owner who has already a customer base needs to know who is buying your product? How old are they? Are they male or female? Are they married, single or divorced? Do they have children? Where do they live? What is their level of education? and so on.
From your research, you’ll be able to make informed marketing decisions about how to price your product/service, how to distribute your product/service, which media channels to use (eg: newspaper, radio or direct marketing) or whether to develop a new product/service. It will also help you make an informed decision about starting, building, consolidating, diversifying or reducing business activity.
If you’ve identified a business problem, research will help you work out what is happening. For example, if your sales have fallen you might discover that your competitor is eating your market share, maybe your sales force is lacking motivation or your product brand is not appealing anymore.
Looking to Expand Business
As a business owner, you should always be looking for newer business avenues to explore. The expansion is not an option, it is a necessity for a business owner. The research will help you identify areas for expansion and test the market’s readiness for a new product/service. For example, you could be looking to open a new retail store to expand and you need to find the right location or expanding your distribution infrastructure which will benefit your customers.
Your research could identify new business opportunities. You may find an un-serviced or under-serviced market. You could identify changing market trends such as population shifts, increasing levels of education or leisure time which bring new opportunities.
It is worthwhile to mention here that there are limits of market research activity. The constant dynamics of market trends is mainly responsible for it. The sample size also plays a big role as market research is normally done with low sampling. The result may not be the exact indicator of the general trend in the population at large.
However, market research still and always will play a vital role in the decision-making process in business. It gives you a fair representation of the present market trends.