Inspiration has struck and you’ve just dreamed up the next big thing!
Way to go! As a small business, we love when new businesses are getting started. It’s hard work, but ultimately so worth it. We know that building a business, or expanding your current business is super exciting! Not to burst your bubble though, but before you jump in head first, it’s probably a good idea to pump the brakes and make sure there is a market for you to sell that next big thing. Finding that out means it’s time to start doing market research for small business.
What is market research, anyway?
We’re sure you’ve heard of market research, but do you know what it entails? In a nutshell, market research for small business and large business alike is just gathering information to help you make business decisions. Typically you’ll want to look at your geographical area, your target customers, and those customers’ preferences.
Why do you need to do market research
You should do market research before digging into starting a business, as well ongoing research for established businesses. If you’re just in the starting phases of a business idea, it’s time to start digging into some data!
Market research helps you find out if a new business is even viable. Your friends and family will always be supportive (if not, maybe get new friends?) of your new ideas, but what do your potential consumers have to say? Market research helps you find out! It also helps you make big financial decisions with more data to support your move.
But isn’t market research super expensive?
Every business needs to do some sort of market research. Big businesses can hire out teams that do market research, or they have internal teams that focus on market research. Which is why, when you’re a small business with a small budget, market research can sound really difficult!
We know the feeling, but trust us, it’s still extremely valuable to help make educated decisions for your business. Doing your own market research may take time, but the information you uncover could prevent a major mishap or reveal an opportunity to better serve your consumers.
Goals for market research
When you’re just diving into market research it’s important to establish goals. With solid goals in place, your focus can be directed to overall efforts, saving loads of time. In general, your goal with market research is to answer a question that can have an impact on your business. You can dig into many different questions including:
- Is your new business viable in this location?
- Is your existing business viable in a new market?
- Would people be more willing to shop online or in store?
- Who exactly are your customers?
- Where can you find more people like your customers?
- Are your marketing efforts effective with your customers?
- Are there any pain points for your customers?
- Do your customers want new products, or updates to existing products?
- Do your customers want your new product idea?
- Are there new industry trends you can capitalize on?
How to find your answers: market research tools
To answer the big questions you’ll need to get creative. Big businesses can take the time and expense of interviewing huge numbers of people, doing focus groups, and hiring experts. For small businesses you’ll likely need to do the bulk of the work yourself.
Before you start designing your research plan, you first need to decide what questions you need to answer with your research. Your research method may be quite different depending on what you ask! Staying focused on the answer you want to get helps you save time.
Types of market research
Market research is typically split into two different types of research, primary and secondary. Primary research looks in depth at your own business, your customers, and information that you should easily have on hand (sales numbers, customer complaints, that kind of thing). Secondary research is less personal, it looks at information other people or businesses have gathered.
You can collect primary research with a survey sent to your customers. Alternatively, you can take a look at secondary data from research reports, magazine articles, even industry specific blogs. When you’re figuring out how to complete your market research you may use one or the other, or a combination of both.
A list of free or inexpensive Market Research tools
When you’re doing market research yourself, be sure to keep in mind the value of your time. For businesses with a small budget utilizing free or inexpensive tools helps to offset the time you’ll spend doing the actual research. The following tools help you work with the budget you’ve got.
Google gives users a ton of free information so be prepared to see their name crop up a lot on this list. The Google Trends site allows you to see how search terms have changed in popularity over time.
This tool helps you get into the head of your customer a bit more. Type in terms around your product or service and you can see what other search terms your customer may also be interested in.
Depending on your industry, it can be more or less easy to find data, research papers, or other insights online. We would start with any industry-specific websites there may be, and follow it up with a look through Google Scholar or the Pew Research Center.
Google Keyword Planner
Doing keyword research may help you figure out what exactly people may want from your product. It can also help tell you how popular of an idea you have in a given geographical area.
If your product or service is very niche, it may be helpful to get into the minds of your audience where they hang out online. Places like Reddit, Quora, specific Facebook groups, even YouTube channels can help you learn more about your customers and their preferences.
If you have a website you should have Google analytics set up. Google Analytics has tons of information you can sift through! One of the most helpful places to look is at is your audience’s behaviour. Even more specifically, look at the behavior flow map, it can show you what pages are less effective than others.
Your Sales Data
If you have sales data, use it! Do you see fluctuations in purchasing patterns? Is one product that you’re super passionate about actually selling? Use the information you already have.
Take a look at your own reviews if you have them. This includes customer feedback that they may not be saying directly to you. You can also look at competitor reviews to see if there are trends in your industry.
Local survey data
If you have access to a small business development center, group, or non-profit, they may have tools or surveys that can help you with market research.
Local business schools
Many business schools have market research as part of the curriculum. Approach the school or professors to see if they would be willing to do a market research project on your business.
Take a look at brands that are comparatively similar. Businesses of the same size, similar products, or related products may give you valuable insight! Take a look at their website and social media to see how they promote products and how effective it may be.
There are many ways you can do surveys online. If you have a dedicated customer base and an email list, you can send a survey to your own customers! There are also paid options like Google Surveys, and Survey Monkey.
Ongoing Market Research for established businesses
For established businesses, market research should be an ongoing part of your marketing plan. You don’t need to be researching constantly, but whenever you’re making business decisions (like rolling out a new product, entering a new market and so on) you should absolutely research first.
The limits of market research
As helpful as market research can be, it’s not a be-all end-all. Utilize your research to make informed choices, but be prepared for unexpected changes! Fluctuations in the economy, politics, and many more factors can change your customers purchasing patterns without much notice. But, don’t get discouraged! A lot of times, new opportunities are uncovered during the research process that gets you started on a new, more profitable idea.
Does market research make you want to say game over? Let’s chat about how best to reach your customers in a free strategy session!