6 Tips for Your Market Research

You have a great idea for a business and you are ready to take action. Or perhaps you are on the fence to take some of your life savings to start that business and be your own boss. In either situation, a market research will help you understand how to make the right moves on your new endeavors.

Keep in mind that the ultimate goal is to be profitable. Therefore, before you start the your research you must first ensure that your idea is feasible to be a business. 

There is no right or wrong to conduct this research. However, I do suggest taking some good, organized notes to where you can easily refer back to it. 

What is a market research

It is the act of gathering useful information from prospects, customers and competitors. Such information will help you understand how people will react to your current or possible service or product.

The level of details used on your research will be completely up to you. It could be a broad and superficial research, or a more in depth. Just remember that the more intelligence you have, better are your changes.

 

1. Demographics 

This data will determine the population for your targeting customers. Relevant information such as age range, income, number of business by type, sales in the category, etc. You can start by searching at American FactFinder, Economic Census, and Bureal of Labor Statistics. 

For a more in depth and focused research, you get more information from a librarian, and your local Chamber of Commerce. 

 

2. Market Saturation

By now, you should have a good idea of your type business and its geographical impact. Google all of the business in your area that offers the same product or service you are looking to provide. Do some digging to find out if there is any of those type of business that recently closed. Go talk to them, see what kind of information they give you. 

How much money is spent in that type of business each year. And the million dollar question, is there room in the market for one more business? 

 

3. Demand

The point of starting a business is to make money through sales. There is no point in starting something if there isn’t an interest in the product or service. Trying to sell kayaks in a area where there isn’t a place for the sport could be a mistake. Finding out if your area needs a bike shop or a Italian restaurant is crucial. 

 

4. Prospect information

One of the best ways to understand your target is looking through trade magazines. You can visit trade shows, talk to people that have in the longer in the business. Understand the habits of your target group. Are they more willing to purchase things online? Or they rather go into a store? 

Conduct surveys among the group that you are targeting. Though this method have low turn outs, many times, if you offer something of value (free prizes, gift cards, free meals, etc) the turn outs could improve.

 

5. Business groups

Another method to gather in-depth data is finding a business groups to your niche in your area. The Chamber of Commerce usually have very good place in finding information pertaining to the business you are trying to start. 

 

6. Local competition

Visit you local competition, shop at their store, talk to them, find more about their products, their marketing technics. Visit websites of similar businesses. Check with brokers, and see if there are any business in the area trying to sell their business. Find out why, and you might even end up buying it. 

 

Launching a business is something that you must think throughly. These are just tips, and just because you come to a less favorable result in any of those items, it does not mean that you business will fail. It just means that you have a understanding of the issue, and you can approach it properly.