Opening a business is a complex process that has plenty of inherent challenges. Sometimes, business and their owners fail to step up to the challenge and the enterprise shutters. Some of the most common reasons businesses, especially small startups, close down include having cash flow problems. However, lack of cash can stem from an even larger problem.
According to a survey of failed businesses in the United States, approximately 42% of businesses that close in the country did so because there was a distinct lack of demand for what they were offering. Your own business can avoid this hurdle by conducting thorough market research before you even open your business.
Learn the importance of market research as well as how to ensure you conduct effective market research efforts.
Why is Market Research Important?
Market research is an essential tool for every kind of business under the sun, whether you’re making robotic vision systems or baking cookies for pets. Doing market research is a staple for large industries but smaller enterprises may not be aware that it is crucial to their survival.
Below are some of the most important benefits conducting thorough market research can convey to your small enterprise.
The most important aspect of market research is identifying whether your business will have a stable pool of customers to cater to. Before you open your business, market research helps find out who is interested in your products and services.
The results of the research can be very surprising as people can differ from your expectations. For example, you may expect your restaurant to cater to young working professionals, but research could reveal that you may look forward to older adults.
The second most important aspect of market research is identifying what you can do to market your business more effectively. By determining who your expected market really is, you can change how you advertise your products, what words you use in your promotional materials and even how you decorate your store.
If you were expecting to cater to young working professionals but find out that older adults will most likely be your market, do a complete overhaul of your marketing to ensure you are appealing to this older market. The data provided by thorough market research is essential in securing your profitability.
By determining what market is available in the area and what sort of changes you’ll have to implement in your strategies, you can learn whether the business you plan on building is feasible. If you don’t think your restaurant can cater to older adults or if changing components can be very expensive, you may want to open a Subway franchise instead. This can save you time and resources that you may have otherwise wasted on a business doomed to fail from the get-go.
How Can You Run Effective Market Research?
If you are opening a new business and want to ensure your success by conducting market research, you may want to learn how you can gather the most information from these efforts.
Below are some of the most important facets of market research that you will need to pay attention to if you want to get reliable and actionable data.
Find a Niche
Don’t stop your research at surface level information like basic demographics. Sure, knowing your market’s age and race can be crucial in your market efforts, but there is so much more you can learn.
What time are they active online? Who do they get recommendations from? Do they value their pets more? How do they celebrate special occasions? Targeted questions can help determine market substrates you can focus on in your marketing efforts.
Do Email Surveys
Physical surveys can be very laborious and there’s no guarantee if you can get them back anyway. Email surveys are not only faster, you can also reach a lot more individuals. The key to successful email surveys is sending out hundreds if not thousands of surveys over the internet. This will ensure that an appreciable number of surveys find their way back to you as most people will not reply.
Talk to Focus Groups
Surveys are great for surface information but the best information can be discovered through focus group discussions. Gather a handful of people who belong to the market niche you hope will become your customers and ask them to participate in in-depth discussions over their attitudes toward your products and services. Their responses can be crucial in creating wider appeal for your brand.
Finally, you should conduct market research as often as necessary. This can be as frequent as every quarter to maybe every six months. This will ensure your brand and marketing strategies are still effective and relevant. Without continual research, you can be wasting money on ineffective methods.
Market research forms a cornerstone of a profitable business. If you don’t want to join the tens of thousands of businesses that have closed down, do a thorough market research.