You may have a golden business idea and feel you can immediately start your new business without any problems. After all, the idea is so good that nothing can stop you from being successful, right? However, the reality is quite different.
Without the right market research, even the best business idea is bound to fail. Market research gives you in-depth insights into your target demographics and helps you check out your competition so that you can create and promote your unique selling point (USP).
Before you begin market research, be sure your business idea is commercially viable. While there are some great ideas out there, they may fall flat when they are scaled to a commercial level.
HuffPost publication summarizes what you need to consider to ensure your business’s viability:
Market saturation. Does your geographical location have a similar business? If so, does this area need another business that is similar to the existing one? Check whether there is space for your business to thrive and flourish. Also, visit the local Chamber of Commerce to find out how much money your industry spends each year in your geographical region. This will allow you to judge whether there is potential for another similar business to break ground there.
Market demand. When a business starts, there should be a demand for it. There is no point in starting something that won’t have any takers. For example, does this area need another Italian restaurant or another burger joint?
Local competition. If there are similar businesses operating in your area, find out how well they are performing and what is unique about them that attracts customers. You should be able to offer customers something unique and valuable in order for them to leave an established business to frequent yours.
Target audience. You should have a way to reach out to your target audience. In the case you are starting a brick-and-mortar establishment, it is necessary that you open your store in an area that your target audience can easily access. On the other hand, if you are starting a digital business, how do you intend to reach your prospective customers? This is something you need to spend time on. You need to have a plan — a written one — to help you out.
Conducting the Market Research
Now that you have the answers and know that your business idea has the potential to succeed, it’s time for the next step. After deep research, use the information and data you’ve found to develop a one-of-a-kind business proposition. By doing so, you enjoy a competitive edge.
How you get information will depend on the kind of business you want to open, and your target audience. However, you can tap into the following resources to extract relevant data:
Trade information. If there is a trade association related to your business in your area, get in touch with them for all possible trade information. Alternatively, you can scour through online and print trade magazines to get the details that you are seeking. You can even visit trade shows if you have the time, money and inclination.
Demographics and economic data. You can acquire a number of business-related data from other sources, whether it be geographical area, age range, total sales for businesses in your niche or income of your target audience. You can use online and offline resources. If you don’t know where to begin, get in touch with a reference librarian to help you find the right databases. You can also use American FactFinder, CensusScope and Datamonitor to pinpoint the information you are looking for.
Local universities. Approach your local universities and business schools to see whether professors would be interested in giving their graduate students an assignment to do a market feasibility study. If so, you can get the students to do the grunt work for you, but make sure you are very clear on what information and data you are looking for.
Business groups, associations and forums. The best place to find data and in-depth information related to your niche is the local Chamber of Commerce. You can also get in touch with associations that help small businesses and entrepreneurs. Online forums are another place to get details from like-minded professionals and individuals.
Prospective customers. Put an ad on Craigslist and you will be able to find willing test subjects to create a focus group. You can conduct surveys among this group so that you receive an honest and unbiased opinion about your services and/or products. Just make sure your test subjects are from the same demographic group you want to target.
Local competition. Visit your local competitors’ shop or store to find out more about their products and services. You can also check out their website. Also, get in touch with business owners who want to sell their business and find out about their sales and revenue. Be sure to find out why the owners are selling their business.
Launching a business is a decision you should think through thoroughly. Market research is an invaluable tool that will ensure you start your business in the correct manner. It will tell you whether your idea is a sparkling one and whether your experience and skills are sufficient enough to make the business a triumph.
The MaCorr Team