GOOD BUSINESS MARKET RESEARCH

Good business market research is as critical to your new business as is having a great product or service that you want to bring to the market.

Market research has only one aim and that is to prove to yourself that you will have a viable market for your idea once you go into business.

As one of the main components of your business plan, your business market research, done well and completely can make the difference between success and failure.

Market research is not difficult and need not be expensive, but it is a must, so you need to complete your research before you go into business. Done properly it will allow you to develop business marketing plans that will guide your business to success.

Hopefully I have stressed the need for market research enough so let’s get into the nitty gritty of doing research.

What is business market research?

Simply put, it is the collection of information that relates to your product and service in your intended market place.

It will help you answer those questions that you must know in order to work around any problems with your marketing and so solve them.

Let’s look at the major questions that you need to get answers to.

1. What demand will my product or service have? Who is there to buy it? How crowded is the market?

   Remember the law of supply and demand. If there is plenty supply and low demand you are dead! Unless you find an unfilled niche!

2. Will your product sell better than the competitions? Is your product so much better or different from the competition that it will sell regardless of the competition? Have you no or little competition? Can you fill a niche?
3. Where will you sell your product or service? What is the best location or area in which to set up your business?
4. If you intend to compete, talk to your competitor’s customers.

Collecting the Information

It is advisable to start your collection of information, through your business market research, before you start your new business; it tends to help you decide if your idea will fly.

Now to getting answers to our questions.

There are basically only three areas that we need to look at for our answers, here goes:-

1. The Industry in which you wish to trade and compete. Look at the entire industry, look for trends and growth. Is there room for you in the industry? Is the industry growing or shrinking? Who are the new entrants to the industry?
2. The Competition. Knowing your competition is vital.

   You will need to know who they are, where they are, both locally and sometimes even internationally. Are they growing in number and by what means are they getting their growth?

3. The Consumer. Market surveys within your proposed area of sales will have to be carried out with potential customers. Define your sales area, the type of customer within the area and their spending power. All the other factors of population, age, unemployment, income levels, etc all play a role here so get them right.

Based on all the information, obtained from your business market research, you will be able to produce sales forecasts for your product or service. A most vital function of your research.

Now that you know what to look for, lets look at where you can find this information.

Finding the Information

Find this information from:-

• Libraries, both university and public.
• Trade associations.
• Government. The U.S. Census Bureau is a great source as is the Department of Commerce. Find them here, Census and Commerce.
• Web sites. All major online services offer news and industry trends. Try also the Marketing Research Association or the American Marketing Association.
• Chambers of Commerce or your local business development agency will have available useful information to help in your business market research. They can also supply maps showing trading areas as well as potential growth areas.
• Many universities and colleges can and are able to help with information. Students wanting to gain experience can be recruited through their business departments to conduct surveys on your behalf.
• Dun and Bradstreet also offer many services and references that can be used in your research. Look them up here.

Before we finish with this subject, just a word on collecting information from your potential customers.

This research is a must if you are to round off your business market research and get a complete and finished picture of your market.

This type of research means interviewing potential customers and so can be expensive if you have to hire a market research firm. Depending on your business type and size, it might be worth the expense.

If you wish to do this yourself, you can find assistance from Small Business Development Centers, the Small Business Administration, as well many universities and colleges.

Using your Information

Business market research can mean the difference between the success or failure of your new business. If you are not convinced of this, then maybe you should not be going into business for yourself!

The days, or even weeks, spent on research have but one aim and that is to allow you to make informed decisions about your future business. Neglect it at your peril.

Now that all your business market research is in the bag, you have to use what you have learnt and apply the information to the success of your business.

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