Market research is a very significant tool for a person who wants to launch a business or grow a business. It involves scientifically-led studies to collect necessary market information, empowering entrepreneurs to take appropriate commercial decisions.
Unfortunately, the study shows market research is a subject that 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 Do 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, and Google Consumer Surveys to understand what people are searching for 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 and share it 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, whether 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 research similar to your product or service has been done already. Magazines and industry review articles come in handy sometimes. If you can afford it, source genuine market feasibility reports from a reputed organization.
Why is Market Research 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:
a) Identifying Prospects
The most important factor of business is to find your customer niche. If you are launching your product, you need to identify whom you are targeting. Who is going to use your product/service? 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.
b) Developing Strategy
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.
c) Solve Business Problems
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.
d) Looking to Expand Business
As a business owner, you should always be looking for newer business avenues to explore. 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 expand your distribution infrastructure which will benefit your customers.
e) Identifying New Business
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 to market research activity. The constant dynamics of market trends are 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.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.