Market research is the foundation for every successful business.
Yes, it’s necessary even for a candy shop.
But the challenge that many business owners have is that they think it’s too complex and expensive.
And it can be…especially when you don’t have the right systems or understanding of marketing research – and let’s not talk about the prices of some of the market research tools!
But don’t break a sweat. In this post, I’ll teach you how to do market research for a startup – and with a small budget.
Sounds enticing? Keep reading to find out exactly how to conduct complete market research on your business.
How To Do Market Research Before Starting Your Business
Market research has several moving parts and it can easily become the most tasking part of starting a business.
But still, it’s EXTREMELY important.
Unfortunately, this is the part that many business owners simply skip over.
Others do a really poor/mediocre job at it, not spending enough time to get it done properly.
An easy way to think of marketing research is – you’re trying to understand your customers better by finding out everything possibly available about them.
Definitely not about their personal lives, but when you’re conducting market research, you’re aiming to understand their pain points and how best you can help them.
The aim is to build a great relationship with your target market.
Just like getting to know someone, you want to know what they like and dislike and everything else about them.
With that in mind, here’s how to do market research:
1. Set Research Objectives
Right off the bat, you need to set objectives.
What exactly do you want to achieve by your research?
Do you want to develop a new product? If yes, what exactly do you want to achieve by developing the product?
Many people start market research without finding out what exactly they want to achieve.
They know that they want to understand their target market…
But they don’t know what exactly they want to know about their target market.
Before starting your market research, ask these questions first:
- What am I trying to discover through this research?
- What do I want to do with whatever I discover?
- Am I asking the right questions? – will the questions I’m asking and the strategies I’m taking help me make the right discoveries?
By asking these questions, you are reducing the chances of letting bias distort the results of your research.
Next, you need to define your target market, which leads me to the next point.
2. Describe Your Target Market Persona
When you’re about to start your market research, you have little or no idea about who your target market is.
And this is exactly where you should start.
Think about it – how can you research something or someone when you can’t recognize or describe it in the first place?
See what I mean?
To describe your target market persona, here are some things that you should consider:
First, start with their age. How old could most people who fall under their category be?
Sometimes you’ll get a mixture of different people but the aim of doing market research is to discover a good description of who your target audience is.
The next thing you need to consider is where your target audience resides. Are you targeting a global audience or a specific location? If your business will be targeted at a specific small location, how specific do you want to be? How small will your business be?
3. Interact with your target market
The only way to know your target market is to interact with them.
As a small business with a limited budget, this could be challenging.
However, you can start by finding out where your target market hangs out.
Thanks to the internet, you can now carry out research very affordably (or even for free).
One of the best ways to interact with your target audience is through social media.
But just like I said, you have to first find out where they hang out.
The next thing you need to do is to search for other people who target the needs of your potential customers (your competitors).
What are those people talking about? What types of responses are they getting from the target market.
Or you can go another route – you can build authority by yourself, through establishing an online presence (this could take quite some time).
Then reach out to people who might seem to be potential clients, not to sell, but to genuinely help them – that’s one of the best ways to get feedback.
You can also use polls on social media – asking targeted questions that can help you find out more about your target audience.
Or, you can also use survey forms – either online or in-person.
If you are looking to save money as much as you can, then the best option is to do a free online survey with google forms or with social media tools like Instagram polls and questionnaires.
4. Identify target market pain points
As you get to interact with your target market, you’ll be able to identify their pain points.
Have genuine conversations with them with the aim of providing value and offering real help – don’t try to sell them on anything.
As you talk to people and build trust with them, they’ll begin to tell you what’s bothering them or what they could use your help with.
Those are their pain points and when you capitalize on fixing those pain points, helping them solve those problems, you’ll find that you’ll gain more trust and build a brand that people want to interact with.
5. Create modified questions – based on results from your interactions with your target market:
As you get to know your target market by interacting with them, the next step is to come up with questions that are tailored to their needs.
Use the feedback you get from your interaction with customers to help you craft questions that will get them talking.
The aim is to get to the bottom of what customers want.
And the truth is that they sometimes don’t know what that is.
They need you to identify their problems or draw their attention to those problems and come up with helpful solutions.
By asking useful questions, you prove to them not only that you understand what they are going through but that you are an expert.
Asking the right questions builds trust and helps you find out more from your potential customers.
6. Identify Competition and discover their gaps
Your competition wants the same thing as you…
The trust and loyalty of customers.
But the fact is that no company can do everything 100% right.
There has to be a gap that you can satisfy through your brand.
Yes, there is much talk about a lot of competition in the market and how hard it is to differentiate…
But, you can still find a basis for differentiation… which is … YOU.
Yes, nobody else can be you, you have a unique personality and that is part of your branding.
7. Create a REAL solution:
After finding out the pain points of your target audience, based on the feedback you get from them, you can create a solution that is tailored to their needs.
The most important thing about creating a solution is – it should be credible and actually provide the results that it promises.
If your product boasts of helping people achieve something, then it should actually do that.
In business, your word is your bond.
Market research is the foundation of any business, yet it’s the one thing that many entrepreneurs tend to skip when they’re about to start a business.
Little wonder the business failure stats are so high.
Do you want to be part of the small percentage of businesses that actually stay successful in the long term?
If you do, then don’t just let it end here with this post. Follow through on your business idea and complete the marketing research process or ask for help.
To be successful, you have to do the difficult things that many other people are unwilling to do.
The decision is yours. Will you take your idea to the next step by conducting market research on it or will you leave it as it is?
Esther Alu, the Founder of TheAceBusiness.com is an entrepreneur who writes step-by-step guides for starting several business ideas. She is constantly learning and discovering effective ways to help her readers launch and grow successful businesses.