Steps to Starting a Small Business – Market Research

Getting enough information on your target market of potential customers is vital to starting a business that will produce income. Making guesses on what the customer really wants will not bring you very far, so it’s important to do some digging and get the answers directly from them through market research which is an important steps to starting a small business.

Some of the following questions to ask in order to device effective strategies:

  • Who is going to buy your product or service?
  • What kind of people are they? (buyer, influencer or end user)
  • How big is the market? (Competitor’s annual sales would give you an estimate)
  • How will market trends going to affect your business?
  • Does your business has any unique selling point?
  • Is the need for your product or service currently not being met?
  • Is the market already saturated?

Why do it?

You will not be able to sell something or services that has no demand. Knowing what the market is looking for and so that you can present it in a new twist, drives the need for a market research. The advantage of small businesses is that they are close to their customer and can easily get information on their purchasing habits.

How to do it?

Most of the big companies spend huge amounts of money on elaborate surveys from renowned researchers to determine if their products or services will appeal to customers at a price they are willing to pay. But for small business owners on a tight budget, there are other means to collect the key data needed without having to spend a fortune.

3 ways to collect information:

  • Get business school students to collect data at the mall.
  • Look for financial data and statistics in local library.
  • Join trade association not only to access market research they have conducted but do the networking there as well.

Do I need any ongoing market research while running the business?

Yes, this is how you gather information to evolve and adapt to the changes in market trends.

3 types of methods:

  • Keep a close watch on what your competitor is doing.
  • Install point-of-sales software to track sales or services trend.
  • Put up customer suggestion box where they can write suggestions.

Every business needs to conduct market research, it is a crucial steps to starting a small business, and tight budgets are no excuse for omitting a research plan. By starting out with some easily accessible resources, you can begin to develop better marketing strategies that can position you for market growth.

Small Business Tip: Get Off the Bandwagon

If you run a small business, it is increasingly important to stay ‘ahead of the game’ instead of just being a player. It would not be a smart business decision to open up a small food market on the adjacent corner of a Loblaws, Walmart Supercentre, Whole Foods and Costco. It doesn’t make sense. You would quickly become part of the small business graveyard.

Your business needs to stand out from the crowd, and since the world is a growing every day, you’re going to need to get creative!

Don’t jump on a bandwagon as it’s barreling through, be a member of the construction team that BUILDS the bandwagon to reap the most benefit as it picks up speed.

Easier said than done – a very select few thought that a micro-blogging platform that only allowed users to speak 140 characters at a time would amass into the social media giant Twitter is today. Ashton Kutcher was a bandwagon builder, and was the first to reach 1 million followers. How many followers do you have?

Not to say that Twitter is dead or dying soon, but if you don’t have a large Twitter following by now… perhaps it’s time to look for a new way of building your online reach and conversation. A new idea is emerging every second of every day, do some research and become an early adopter!

Here are a few leads to get you started:

Group Buying – is on the cusp of becoming huge, and it has been for a few years. Do some research and get involved with sites that give away daily deals- it might actually help promote your business/products. Best case scenario? The site becomes huge in your area/industry and sales skyrocket as a result.

QR Codes– Smartphone barcodes that are starting to pop up everywhere (heck, I even sit on one in the subway every morning). Since 1 in every 2 people will have a Smartphone by Christmas (it’s true!) this might just be the next massive trend in technology and advertising. “Social scanning” includes tools like Stickybits and SCVNGR that incorporate the new location ‘checking in’ fad that might also be on the brink of social domination.

Q/A Platforms – Millions of people are starting to ask questions on sites like Quora and Linked In. Pick a platform that speaks directly to your audience, and start answering some questions. Get in on the conversations; build a reputation as an expert and you’ll start to stand out from the rest of the social media crowd.

Find an alternative to the ‘biggies’ – use Statusnet instead of Twitter, use Aardvark instead of Linked In Answers, use Brightkite instead of Foursquare. Try to hit the bigtime with an emerging trend rather than trying to scream over the noise of the crowd.

Be proactive and set yourself up for success!

Best Resources for Small Businesses

Being a successful small business is not easy. The five core challenges most small business face are time management, pricing, cash flow, managing growth and marketing / client acquisition. In order to succeed, you must arm yourself against these challenges. The good news is that there are a number of fabulous resources to help you with these issues.

Actively seek out the right small business information.
Many small business owners are so over-extended that they neglect staying informed about business trends. This is a fatal error. In today’s modern marketplace, you simply cannot succeed if you run your business on intuition alone. You may stay afloat in the short run, but you will eventually lose out to better informed competitors.

There are a number of incredible online resources that are both free and invaluable. Sites like Inc.com and Entrepreneur.com provide tips on just about everything from starting your business to navigating advanced legal issues. They feature in depth information on running your business, leadership / management techniques, sales & marketing tips, small business technology and finances.

Helpful Tip: Set aside at least 1 hour each week to review these sites. If you find that you prefer to read in bed, consider subscribing to a few of these magazines. This information will make you and your business stronger.

Know your industry and target market in real time.
In our modern age, trends shift at break-neck speed. It is important to stay abreast of developments in both your industry and your target market’s microcosm. After all, more often than not, what concerned your target market 3 months ago is now ancient history.

Subscribe to industry related publications and consume the same media as your target market. If you sell jewelry for eco-friendly women in their thirties and forties, spend an hour each week reading news and publications that are relevant to that market. Likewise, be sure to check industry news every week. For example, using the same eco-friendly jewelry analogy, you might read up on green product developments, new fashion trends or even ecological political issues.

Helpful Tip: Set two separate Google Alerts – one on your industry and one for your target market – to send you period updates on relevant news. Google will send these news stories to you automatically, making it easy to skim over the headlines and read through the meaningful stories.

Find the right on-line partnerships.
The proliferation of online office supply stores makes economically and efficiently stocking your office a lot easier than it was 10 years ago. Buying office supplies online takes less time and makes price comparison easy. Because of online competition, online suppliers are eager to earn your business. The good ones will provide a wealth of free information on their site and happily take your calls to field questions and offer advice. For example, if you are looking for discounted printer ink cartridges but are a little confused about toner versus regular stores like compandsave not only provide free yet invaluable printer cartridge information resource center but they also eagerly accept calls and offer advice on how to save on office supplies.

Helpful Tip: When you find a supplier with great prices and customer service, hold onto them for the long-haul. A good supplier relationship can save you thousands, streamline your operations and free up your time so you can focus on growing your business.