All about Market Research
So many people start up a business without doing any market research. They then wonder why their product or service does not get the sales they were expecting and ultimately, why their business is failing. Read on to find out why market research is important for your business and why by doing it you will have a better chance of success.
Why market research is important if you want your small business to be successful
Unfortunately, many small business owners disregard the importance of market research. It is all too common for small business owners to ignore market research altogether and to base their business idea on their own assumptions. All too often, this results in the business failing which could have been avoided by doing some basic research.
The Danger of Assumptions
Many small business owners assume that they understand what their customers want and what motivates them to buy. But relying on assumptions is a dangerous game. I have met all too many business owners who think that by creating a similar product at a lower price point, buyers will flock to them. This is not always the case and has proven to be a downfall for far too many.
You need to find out how to connect with your target market and understand their needs and buying habits. You need to understand why your target market buy what they do (and rarely is it price!), why they choose one supplier over another and what would motivate them to move to a new supplier should one enter the market (you!)
Go out there and get cold, hard facts and figures, not just base your business on loose guesses. This will then give you a competitive advantage when entering the market. The more you can find out about how much demand there will be for your product or service, who is likely to buy it, what they will pay and what your competitors are doing the better chance you have of creating something successful.
Market research will help you:
- Test the viability of your business idea
- Who your ideal customers are (your target market)
- Will these customers buy from you and how much will they pay
- What the market trends are in your industry
- Find out who your prospective customers buy from already (your competitors)
- What your competitors are doing well, doing badly and what they are charging (competitor analysis)
You need to plan your market research carefully to get the answers you need and you also need to allow time to carry it out.
And if you don’t get the answers you were hoping for, this does not necessarily mean that your business idea will fail. It just means that you may need to adapt your product or service to suit the needs of your target market. I started up my business consultancy but a lot of the women I met who needed my help couldn’t afford my hourly rate. That is when I decided to start up my on-line advice which was more affordable for them and gave them access to a lot of the advice they needed.
On the other hand, please do not bury your head in the sand and ignore the results of market research if you don’t hear what you want to. Too many small business owners get personally attached to their idea and refuse to listen to the evidence in front of them.
Now you know why market research is important, it is essential to remain objective when carrying out the research and to use the results to plan the most effective way to give your business the best chance of success.