Why bother with market research? Anyone who's ever worked through a business plan knows the answer to this one. Trying to start a small business without researching your potential market is as sensible as setting out for the North pole with a surfboard.
But market research isn't just something you do when you're working on your business plan and then shelve. Market research needs to be an integral, ongoing part of your business' development.
It's crucial to analyze your market and target your clientele before you waste money on advertising that won't get you the results you want. Market research is also critical before you spend time and money developing a new product or service.
I'm always amazed at the number of business people who just seem to do whatever they feel like doing - without bothering to do any market research at all. For instance, several months ago, one local business that has specialized in underground sprinkling systems and hot tubs for years decided to start selling go carts. Now they have a fleet of go carts lined up outside their business with a huge "Must go; prices slashed" banner over them.
This is no surprise to anyone else. For one thing, go carts have nothing to do with their usual products, so why would their regular customers be interested in them? For another, even cursory research into the population demographics here would reveal that the majority of consumers in this retirement town are elderly, and therefore are probably not going to buy very many go carts.
My guess is that the business owner became personally enamored with go carts and decided to sell them because he liked them. I like lots of things, but that doesn't mean that investing my time and money to sell them to other people is a good idea. Investing time and money in market research instead can save you a lot of grief.
Conducting market research essentially means gathering the information you need to make decisions about your business. Market research is the systematic gathering, recording, and analyzing data relevant to selling the goods and/or services you produce.
There are a great many companies out there that will be glad to conduct paid market research for you. If, like many small business owners, hiring a company to do market research isn't in your budget, the rest of this article outlines how you can do your own market research, including tips for designing your own market research surveys and questionnaires. Continue on to the next page to learn about the basics of market research.
