Market research is the first thing you should do before anything else for your business startup. Read this to find out how market research is generally done.
I believe that at a certain point in our life, we suddenly have a light-bulb moment. A business idea that we feel the impulse to develop it, or at least fantasize the purpose of developing it.
Entertaining that idea is fun and all as long as you leave it in the fantasy zone, but if you finally decide to go for it, you had better know how to do market research for your startup business.
Otherwise, you might end up eating a pack of ramen for several months, and this is spoken from personal experience.
How to research your market for business startup
Do your research – Primary research
Wait, wait, now, now, please don’t boo at my face just yet. What I am trying to say here is that you should get yourself familiarised with the market. And what is a better way to do so other than look into the current market itself? Primary research methods include:
- Your observations
Sort out your data priority
Depending on the nature of your business, you might want to prioritize your time and resources on a set of data that is relevant and crucial to kick-start your business. All bits and pieces of information help your business out one way or another, but with limited resources and the urgency to reach breakeven, think about what is relevant to your ideas. Examples of this data include:
- Price of similar products or services on the market
- Competitors within your vicinity
- Is there an increasing or decreasing trending on how customers prefer to consume related products/services?
- What do people do to keep quality up?
- How much money are people willing to spend on the same products/services these days?
- Demographic data of your area
- Local universities, schools, etc.
Cheaper alternative information sources – secondary research
Most of the time, people do not have the time or the resources to do primary research; this is where you switch to secondary research, also known as desk research. Examples of this method are as follows:
- Internet research (Google is your best friend)
- Existing records of market research
- Available data from your stock lists or other people’s customer database
- Market research agencies such as local councils, firm specializing in market research and so on.
- Legal consultants
- Accounting consultants
- Tax agents
Use this research to get a fundamental understanding of what is happening to your relevant industry, current trending, and such.
Set-up a budget for your research methods
Decide how much money you can spare for the research. Think about once you have gone through with this initial preparation, how much you might need to set up your business operation. Try to estimate with some leeway for safety purposes. Some common overheads expenses you should be aware of include:
- Legal registration costs
- Office/store rental costs
- Necessary equipment
- Basic staffing
- Your living expenses
- General office expenses such as electricity and such.
Remember, this is your business and your money. You do not want to spend it on things you do not need and go bankrupt before you even start.
Also, it is maybe worth your time to look up how to fully utilize Google Keyword Planner and Analysis tools as they provide search results to popular keywords and are free.
Also read: 5 advantages of hiring professional writing services for your business
Make sense of your data
Once you have gathered enough information for your start-up, you should make sense of the information and determine the direction you would like your business to head toward. Since you already spent your hard earned money on gathering those data, might as well make full use of it.
The following two methods are some of the most commonly used approach to analysis a business, use the data you have obtained, and analyze your business. Then plan a pathway that you would like to travel down the road of developing it.
This is a popular method taught by many universities and used by many organizations. Apply the information you have to this analysis method to see where you stand on the market.
S – Strengths: what are the things that put you ahead of your competitors?
W – Weaknesses: what are the things that put your competitors ahead of you?
O – Opportunities: With your current circumstances or what you are about to do, what can be exploited to expand and develop your business?
T – Threats: Are there anything you foresee might hurt your business such as sponsors withdrawing money half-way through? Or perhaps a legal regulation that is waiting to go through and when it does might cause you to change partly if not entirely how your business should run?
Another popular analysis method similar to SWOT but it helps you to make more sense of your business in greater detail.
P – Political: Tax policy, employment laws, trade restriction, health, safety code, etc.
E – Economic: Economic growth, bank interests on loans, foreign currency exchange rate, and etc.
S – Social: age groups within your area, population growth, etc.
T – Technological: Mobile application, automation, robotic and etc.
Well, in the end, it is your business. If you decide heading in blind is more of your style, then be my guest. However, should you decide that you do not want to end up like restaurant owners in Kitchen Nightmares reality TV show and having to invite a similar version of Mr. Ramsay to rescue your business, I strongly advise this market research to be taken seriously.
Also read: 5 must-known design tips for startup websites