Why Market Research is Important
For Your Small Business
By Leo Thomas
Before you embark upon your new venture of starting up a small business there are a few things you need to be aware of before you borrow or invest any money. Indeed, you will need to make sure you do some thorough market research for your small business even before you start drafting any business plan. This article will discuss why market research is important for your small business and a major ingredient for helping it to succeed.
First of all you must find out who your target audience is. Ask yourself what type of people will be interested in your product or service and why it will appeal to them. Discover the demographics of the people who will utilize your product or service so that you can then focus the majority of your marketing on those potential customers. For example, if you plan to sell roller hockey gear, you will most likely focus on the younger generation and avoid the elderly.
Next, you should try to find out if there is a demand for your product or service and if people really need it. Talk to your family, friends and other contacts and find out what they think about your proposed product or services and their associated features. If you find out that no one seems to be excited or interested in your product, it may not be worth your time or money to push ahead with it. This is why it is essential to do market research before you start your business and not while you are struggling to make it succeed.
Part of your research should also include sending out some simple questionnaires to find out some further information about your customers’ ‘needs’ and ‘wants’. You can keep it simple and just send it to a sample of people. No one likes to fill out large questionnaires or long surveys, but make sure you include the main details that you need to research for your small business.
One other thing that is recommended that you research before you start a small business is the competition you will face. Will your product or service be able to compete with these other businesses? Who are your main competitors? Are their products or services better value then yours? Can they produce more and cheaper products or services than you can? You will need to be very honest with yourself as regards these questions. Make sure that you are financially and logistically able to compete effectively with the competition in your chosen market place, otherwise the whole new business experience could be a very costly one.
Starting a small business can be exciting but scary at the same time. Make sure you do your homework before you jump into any market so that you are prepared. But as long as you do some basic market research and find out the important information for your small business you will stand more chance of success.
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