3 Essentials of Market Research

Video Source: SmallBusinessBC via Youtube

Market research is the most critical element of starting and growing a successful business, yet it is often overlooked completely or glossed over. Most entrepreneurs in the start-up stage are so enamoured with their idea that they are actually reluctant to go out and do research that might prove it to be unviable. This might seem illogical – surely it makes more sense to find out for sure if your idea is viable and to understand how much competition you have prior to sinking countless hours and dollars into the pursuit of your venture? To those sitting on the sidelines this might seem obvious, but to someone in the early throws of entrepreneurial passion, their enthusiasm and confidence are at an all-time high and the possibility that their idea won’t succeed barely enters the picture.

In many ways this “naive enthusiasm” reminds me of what it is like to have a child. I always wanted kids and was super-excited when I was finally expecting our son. I knew on some level that having kids was a lot of work, but the majority of thoughts in my mind were about the “romantic” upside of having a family. In retrospect, adding a child to our lives has been a lot more challenging than I anticipated and we would have benefited from a bit more planning outside of what color to paint his room! Some of my friends with kids would go as far as to joke that if people really knew what having kids was going to do to their lives, a lot more would choose not to have them.

Starting a business is similar. The naive enthusiasm helps to get over the fear of getting started, but doing more preparation will go a long way towards minimizing the challenges of getting your venture from idea to profitability and keeping it there. A Royal Bank survey  cited in Small Business BC Magazine  confirms this. It found that 59% of small business owners wished they had done more market research before they started their business.

The same article gives us three essentials of market research that will help you understand the viability of your business. While sometimes this research might cause a fledgling entrepreneur to trash their business aspirations altogether, it is more likely to simply help strengthen their business concept, better inform their marketing plan, and contribute to faster and greater success.

1) Identify your target market

Make sure you really understand who you are trying to sell to. “Everyone” is not a target market, yet it is surprising how many budding entrepreneurs truly see everyone as a potential customer. The problem with selling to everyone is that your marketing campaigns will need to be so general as to be bland and ineffective.  Consider things like age, income, personality, values, attitudes. These attributes can be crucial on where you distribute your product or service and how you market it. The more you understand the ideal customer for your product, the easier it will be to focus your marketing dollars and efforts on attracting them. Marketing to “everyone” is expensive and might be best left to the companies that can afford the Superbowl ads.

2) Know your competition

Take advantage of business directories, web searches, and industry knowledge to fine tune you approach. Ask other seasoned marketers for tricks and tips that others have come across during their career. Looking at your competition can be scary because it might point out where you don’t measure up. Better to do this at the beginning so that you can design in some differentiators to set you apart from them – and possibly even get some of their customers –  than to be scrambling to do it after you discover your potential customers choosing your competitor over you.

3) Understand current and future trends

Make sure you stay connected with tech opportunities that can boost awareness or improve company performance. Social media, for example, is a great way to make strong connections with fans and customers. Be aware, however, that evolving technology like new software and electronics can be a possible threat to your business. Technology is impacting every aspect of how we do business and the kinds of businesses that we do.

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