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Market research: the basics

Many small businesses see market research as a luxury but this is not so. It is a valuable growth tool for any business no matter the size. By doing market research you will be able to understand your client base better, keep your business model relevant and develop good growth goals for your company.

When you start your market research it is important to approach it in the most objective manner possible. There are two types of market research you can do. Primary market research refers to data sourced directly from your customers, competition or location. This can be done through questionnaires, focus groups, surveys, and customer feedback. Secondary market research is information and data that has been collected and analyzed by a secondary source. You can use this research to identify competitors and potential markets.

Some common market research mistakes that people do are as follows:

  • Using only information found on the Web. This information may be a good starting point but it might not be relevant to the location you are in.
  • Only interviewing friends and family: Again this is a great starting point but it is important to contact potential clients and competitors outside of your friends and family so you can get an accurate understanding of your market.
  • Using only secondary research. This research will be great for groundwork on your market but it is important to also do primary research so that you can have a view of the market in its current state.

Things to consider when you collect your data:

  • Make sure you have a concise idea of what product or business you want to research. It does not help if you have a broad idea as then your research will be inconclusive. It is important to be objective as well.
  • Investigate and research similar businesses to yours. You could do this through telephonic interviews with the owners.
  • Look at your past sales records and do small scale sale experiments. By review your sales you can see which seasons you are selling the most in and who your customers are.
  • Have a focus group of potential customers and ask them relevant questions about your product and business.
  • Ask your local university if they have students who would be interested in doing market research for a project in their course. They may ask you to pay but it may be cheaper than going to a market research company.
  • Know your competition. Go to their stores and see who their customers are and how many customers they have at different times of the day. View their social media sites and see what they are doing. This will give you an idea of what works and what is lacking in the market you wish to enter.

When you have got all your data it is important to collate it into usable information. Try not to be sidetracked by information which is not relevant to the objectives that you have stated at the beginning of your research. Put the data into tables and lists so that you can see the trends that are highlighted.

When you are done you will be able to use this information to create the best product or business from the start.

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