Conducting small business market research involves looking at your customer base.
You need to know about their behaviours, wants and needs and you need to look at the industry to see how your future competitors are currently serving the market.
Your market research will look at the conditions in the market (and the wider economy), and attempt to forecast future trends and identifies how your new business might fit within the market.
What you are looking for is gaps. A section of the market that is not being served well at them moment. If you can identify the needs and wants of a group of consumers that are either not currently in the market (because no-one is meeting their needs) or who are unsatisfied with their current options, you are on the way to having a viable business model.
Small business market research can produce little nuggets that can make all the difference between being profitable and just scrapping by. And I am afraid it is one of those things you really need to do, and you need to do it well!
Because, regardless of everything else you do to start your small business:
- If there is not a viable market for you to enter that has large
numbers of customers willing to buy your product or services - your business
- If you enter the market with a product or service that is not
quite what those customers want - your business will fail!
- If you cannot reach those customers with information about your
product or service - your business will fail!
- If you reach those customers with the wrong information
about your product or service - your business will fail!
- If the market you try to enter is saturated or the competition
is too strong - your business will fail!
Where to Start Your Small Business Market Research
The key to approaching market research is to understand the objectives of
undertaking the research before you begin, and the use of a systematic approach.
The primary objective of analyzing the market is to identify the profit
potential within a market and to uncover the threats to and opportunities for
that profitability. The more detailed your research, particularly in the
pre-startup phase of your business, the more likely it is that you will be able
to position yourself in an area of the market that is not currently being
Market research can tell you whether or not your product/service will appeal
to your target customers, where they are and how you can reach them.
If you decide not to do the research, or rely on the results of a poorly
conducted research effort, you are putting the future of your business in
serious jeopardy! If you are not confident in your own ability to conduct the
research, you should seriously consider hiring a market research consultant to
do the work for you. A few thousand dollars now could literally save you
hundreds of thousands later.
There are four major steps to the process of market research analysis:
Not Planning on Selling Anything?
Don't kid yourself, even if you are not planning on selling any products you are still selling yourself and your knowledge on your topic. Even with an online business that does not focus on product sales (either physical or digital) you still need to know who is in the market for what you have to offer.
That means you need to do some research on your site concept to make sure that there are enough people out there searching for what you plan to offer to make your online business viable. Most of the information you will need to find to assess the market, your target customers and your competitors is available by doing some in-depth keyword research.
And there are several methods you can use to do that research. Some are free and others are paid, and as is usually the case, you will get what you pay for in terms of quality and quantity!
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