It can be exciting to start a new business. It’s a fun exercise to think about launching and promoting and all the minutiae. For example, you’ll need a website. Of course. Further, maybe you should be planning out your presence on Facebook, LinkedIn, or Twitter. Certainly, social media will play a role in getting the word out about the launch of your new venture!
Hold your horses there, friend. Before getting yourself lost in tiny details, which may or may not be relevant in the end, you need to conduct some due diligence. You need to engage in some proper market research. If you don’t know what that is, it’s essentially obtaining feedback from consumers on the products and services you plan to sell.
Market research is also gathering actionable intelligence on the competitors you have in the marketplace. For example, you should gain a thorough understanding of how your competitors are pricing themselves and why. You should also get a good picture of what they’re doing to market their businesses. All of that is information you’ll need when putting together your business plan.
Make no mistake. You should put together a proper business plan before starting your venture. Remember that having a written plan is like having a roadmap to which you can often refer. It’s great to be able to see whether you’re on track to meet the goals you’ve set for yourself and your business or where you may have started to falter.
Regardless, before you can write a professional business plan or start a business or anything at all … you need to do the heavy lifting and conduct market research.
What is market research?
While we touched on what market research is briefly, let’s discuss it a bit more. It’s basically an entire process of identifying and gathering information about your target customers and your industry as a whole. You need to be able to answer questions like whether people even want what you’re offering. If they do, what kind of problems do your products or services help people to overcome? Are there other services or products like yours already on the market? If so, why will people choose yours over what’s already out there?
Examples of some other questions market research can help you answer are things like, what mistakes are your competitors making? Where are they dropping the ball, and how can you capitalize on their faults?
You need to get a firm grasp as to how large your market is. How many people will pay attention to your offerings? Knowing this information can help you estimate how much you’ll need for your start-up budget. You can also begin to calculate revenue and how profitable your new business may become.
You need to also get a handle on who your customers are likely to be. What are their demographics? Where do they live? What’s their employment range and income rate? All of that is starter information when building out a customer avatar (also known as a marketing persona), representing your ideal customer.
All of the data gathering you need to be able to answer vital business questions, tailor your brand’s message, and engage in marketing is known as market research. Engaging in it correctly can help you ensure that your offerings match your target customers’ needs and desires. Of course, when people want what you have to sell, your conversion rates will be higher, and so will your sales and revenue.
How to conduct market research for a new business
There are actually two different kinds of market research. There’s primary and secondary. You can speed up the whole process of data acquisition by categorizing your objectives into one or the other. That happens by identifying and choosing the best methods to obtain the information for which you’re looking.
Primary research
Primary research is conducted in person. It’s firsthand and focuses on using methods like interviews, focus groups, and surveys. When engaging in primary research, your goal is to get direct information and feedback, which you can’t quickly obtain through roundabout techniques.
Secondary research
If primary research focuses on firsthand data, then secondary research focuses on secondhand methods. (Secondhand doesn’t mean less valuable.) Methods include gathering data from sources like publicly available statistics, white papers, case studies, research data, sales data, and academic articles. Here, you want to focus on getting a big picture view of consumer behavior and market trends.
Examples of market research objectives
Just to recap some of the examples mentioned previously, market research objectives can include:
- Gathering consumer data on behavior to focus on marketing strategies, product features, and price points.
- Collecting industry, demographic, or product data to ensure that you’re planned offerings match the needs and desires of your target customers.
- Acquiring competitor intelligence to see where you can take advantage and where you may need to up your game.
Wrapping up
It’s vital to engage in market research to gain an in-depth understanding of your industry and target audience. You must be able to price your products and services competitively. Additionally, you’ve got to be able to predict future revenue. If you don’t conduct market research, any efforts you make will be based on guesses rather than driven by data. That’s not a winning strategy. Therefore, do your due diligence. Conduct market research the right way, and gain the information you need to enter the market successfully.
