If you’re stuck on the market research portion of your business plan, you’re not alone. Many business owners find this step to be a bit overwhelming. They realize there is a virtually limitless amount of information to be gathered and interpreted.
But be aware that it’s worth doing a good amount of digging to get this section right.
Effective market research for a startup results in clear answers. These answers show what your business needs to do in order to be most successful. Great research compares the competition. It analyzes gaps that you can fill. Doing research means using industry data to forecast your own potential. This can mean the difference between success and failure for any startup.
Let’s dive in deeper to explore this vital component of your business plan success. The following are 3 tips to consider:
- The Focus
- Market Research to Marketing Efforts
- The Value
To survive in business, you must understand your customers, as well as the market in general. Taking the time to do this research thoroughly and with proper diligence will show potential investors you mean business, if you plan to pitch for funding. Whether you are seeking funding or not, knowing how to do market research for a startup will also serve to provide invaluable information for launching and operating your company successfully.
Market Research to Marketing Efforts
Effective market research takes a great deal of unearthing in an attempt to understand what will make customers buy from you. It also helps you understand why customers might buy your product. The point of the research is to understand the behaviors and factors that play into purchasing decisions.
This is often why businesses start with market research when creating their marketing plan. Marketing requires you know your industry, your competition, and your customers very well. This is why great market research correlates with creating a great marketing strategy.
Simply put, market research tries to find what can bring a profit. It identifies competitors, threats, and major players in your industry, while evaluating whether their existing products and services are filling customers’ needs.
To get started, take a look at comparable businesses within your industry. Look for businesses that are a similar size, and similar operating age, with a similar number of people running the company. Consider their pricing strategy, marketing strategy, and customer satisfaction rates. This data alone can show you a lot about how you can better serve the market with your own business.
Think of market research as a dry run for your business idea. It’s a safe, theoretical way to try out your idea. So be open to realistically finding just how effective your idea may or may not be in the real world – because that’s exactly what you’ll discover. And if you’re planning for long-term success? Realize that market research never stops. It’s conducted not only by new businesses, but also by long-established businesses. (In fact, it’s how the successful ones build and ensure future success.)
Getting Started – How to Do Market Research for a Startup
First, use online resources available when exploring market research for your startup. Check out these resources for conducting effective research:
U.S. Census Bureau: A good source for market info, such as size and demographics.
Bureau of Labor Statistics: Another good source of trustworthy info.
CensusScope: Get census results here.
USA.gov: Free and accurate government data.
PR Newswire: A publicly available source of industry-specific info.
Beyond online options, consider physical stops in your local city. Visit businesses and individuals that will be potential customers and survey them about your idea for organic market data. Also consider visiting your local Chamber of Commerce. This can be a great source for obtaining geographically specific data to use in your business plan.
Also consider a local University or Business School for local data and industry statistics that would otherwise be expensive to buy online in a formal report. Academia can provide a wealth of study results, especially if you need local information.