As the name suggests, small businesses are often close-knit ventures run by families or those in the local community. Without a global chain to withstand any turbulence in the economy or even to your business itself, it’s essential that what you offer continues to be relevant and ultimately brings in a healthy profit for your company.
Likewise, you may be considering starting a business and want to be confident that it will be a success. Either way, getting inside the minds of your customers including those who wouldn’t currently choose to do business with you can be incredibly insightful.
What Is Market Research?
Market research dates back to medieval times when Johann Fugger, a German textile manufacturer, travelled from Augsburg to Graben to gather more information on the international textiles industry. Even though the means available to him would have been extremely primitive at that time, understanding how to grow his business was still essential.
Although the way in which market research is conducted has dramatically evolved over the years, the ethos behind why it’s important remains unchanged from its origins, in that it’s all about helping businesses to better understand their audiences.
The process involves gathering data about your products, services or the market you operate in as a whole. The idea is that from the results you gather, you can make more informed decisions about your business that are going to help it align with your customers, improving the efficiency and therefore the success of your company.
Why Is Market Research Important?
Running a business without conducting regular market research can be likened to driving in an unfamiliar city without a map or GPS. On the one hand, you kind of know where you are going. But, because you’re not entirely sure, you end up taking longer to reach your destination, using up more fuel than necessary and frustrating your passengers in the process. Some will also get so lost on the journey, that they either give up or simply fail.
Given 60% of businesses fail within the first 3 years, and a lack of market research is cited as one of the main causes, it’s not something you can afford to ignore, regardless of the industry you operate within.
The bottom line is that unless your business syncs up with the needs of your customers, it cannot reach its potential. Hence, market research is there to offer a clear guide of your business itself, helping to outline any reasons why someone would shop with a competitor versus your brand. The information you discover will help you change that outcome.
Also, don’t forget that trends are ever changing too. Being complacent and not regularly checking to see whether there is still a demand for what you are offering can be a huge mistake. Therefore, market research will help ensure your business is always on track, especially as we navigate uncertain times financially within the wider global economy.
How To Do Market Research For A Small Business
As a business, you have to research everything from choosing a memorable company name to the cost of hiring your employees. Market research is a little different in that the answers to your questions aren’t going to be so readily available, as they are in the case of finding competitive business insurance quotes here on NimbleFins as an example.
Instead, you need to think about what you want the answers to, and the best ways to receive information that will be of genuine benefit.
There are many different ways of categorising how market research is undertaken, but the following steps outline what’s involved.
Surveys Competitive analysis Digital data collection Interviews Focus groups Customer observation Product testing Postal surveys
The first stage of market research is collecting as much relevant data as possible. Modern technology allows for ease of data collection, especially with regards to online surveys or even remote focus groups. However, depending on your demographic you may wish to carry out traditional methods of understanding your niche instead.
To undertake the research, you will need either a company representative or a neutral party to initiate dialogue with focus groups or the general public. Their responses will need to be noted so that they can be processed. Consider which method would lead to the most honest responses, which will provide you with the most helpful information.
Remember that the larger the data type and size, the more accurate the results will likely be.
Sample sizes Sample types Data sources Identifying trends Noting down observations
Once all the data has been collected and processed, it’s time to visualise it in the form of interactive reports. If done correctly, it should be easy to ascertain key trends about your business and the wider market it sits within.
In some cases, you may wish to share some findings with your customers too. For example, if 96% of people rated your services as excellent, this can instil trust in your business.
Or, you could share a stat such as ‘90% of homeowners neglect their roof’, explaining why this is a problem and how your roofing business can help - which can add persuasion within your marketing. It’s possible to apply the same analogy for any stats that work in your favour depending on what your business offers.
Clearer business plan for new ventures Changes to unsuccessful product offerings Informed investments for the business or external investors Avoiding costly mistakes with business direction More informed marketing strategy Using information to increase profits
Now you have all the crucial information you need, it’s time to implement the findings in a way that’s going to strengthen your business.
For example, you may discover that there isn’t much demand for a particular service you were planning on offering. On the flip side, there could be a lot of requests for services you aren’t providing.
The overall aim is to keep what’s working and change what isn’t, with the correct information behind you to back up your business decisions.
To Sum Up
If you don’t know what the wider public are thinking about your business or your industry as a whole, how can you be sure you are aligning with their needs? Market research helps business owners better understand their customers so that they can streamline their offerings as a result.
Whether you’re a start-up or an existing small business, market research continues to provide value to all industries. If there’s an area of your business you’d like to improve upon, market research should be a priority.