In this article, we offer six ways to conduct market research for a new business. Conducting market research when writing your business plan is one of the most important aspects of a new business. It’s best to undertake Market Research before you start your business.
You need to be able to understand who are your target customers, which competitors you are going to come up against, what their strengths and weaknesses are. Also what is the price a customer would be willing to pay and when will they buy. Most importantly, how are you going to make money?
Your projected sales figures and profit margins will be more accurate if you understand your market. Before you start the business, you will base these sales figures on assumptions. However, you must make assumptions based on solid Market Research behind them. When conducting Conducting market research, it’s best to take a look at the following areas:
1. Customer profiling
Think about your business as if you were the customer wanting what you provide:
- Who are your customers?
- What’s their education level?
- What’s their social status?
- Where do they currently shop?
- Where do they live?
- Male or female?
- How old are they?
- What’s their income?
- Will they have any hobbies and interests?
- Do they use social media?
- Do they read newspapers and magazines?
- Why will they buy from you rather than someone else?
Answering these questions will tell you how to get hold of your customer, the values you need within your branding and the price point they will accept or expect. You are now in a better position to understand what problems you are going to solve for them. List the benefits of buying from you.
2. Competitor analysis
You must understand your competitors are, how big they are and where they are in the world. Round the corner or across the globe? SWOT analysis of your competition is a great start. Find out what they do well and what they struggle with. Their strengths and weaknesses will reveal opportunities for your new business. Are they missing any unexploited niches?
3. Customer surveys
If you want to know how to improve on what’s already out there, ask your customers. Write down what you need to know, create some well thought out questions and go out and ask potential customers. Have some information about your offering (and if appropriate, maybe free samples or offer a discount code) and then ask them questions. If you are online, then try and write an online survey. Place a social media advert, like Facebook and share the study in LinkedIn and Facebook groups. But you will find the best Intelligence will by speaking to people.
4. Industry bench-marking reports
Banks, accountants and business support groups may have access to industry reports which will give you a better understand ing of the market, the profit to be had and the key players in the industry.
5. Demographic information
If you are looking to set up a business to cater for a specific location, have a look at government census information and other demographic and economical government, state, county and council data sets.
6. Market size
Look for relevant trade bodies, researchers or influencers and look for figures telling you the size of the market you have entered.
In this article, we offered 6 ways to conduct market research for a new business. Information from these or any other resources will help you with three critical things—mitigating risk and reducing uncertainty and growing your business to the levels you desire.