There’s a brilliant business idea sitting pretty at the centre of your thoughts now, and you’re just setting things in motion to bring it to life. You’re convinced that it’s going to be a hit because you know the market (or so you think), and the product you’ll be pushing is just the sort of thing that people would want to buy. Maybe it’ll take a little while to lift off, but when it does, it’ll meet people’s pressing needs and send shiploads of money your way…
Fine. But have you actually researched the market?
It’s dangerous to start a business without taking soundings of the terrain on which it will be sailing on first. Even if you have some experience in the industry, it’s better to err on the side of caution by surveying the market, just to see if there are opportunities or dangers you might be overlooking.
Market research isn’t a thing for most newbies in these parts, but it should be. The uncertainties of our business climate make it expedient. Market research helps business people understand the sector they want to plunge into. If done properly, it could reveal a lot of information: the size of the market and the potential demand for one’s product or service, possible threats to the stability of the business, who your competitors are, pricing, possible revenue levels, and so on. Simply sliding into business without investigating the market is like journeying blind. You might get to your destination if you’re lucky, but the chances of doing so are slim.
If you’re already convinced that market research is something you should do before setting up your business, but don’t know how to go about it, here’s how you can get it done.
- Know what information you want to get
These are the fundamental questions you need to answer with this exercise:
Is the market saturated?
If there are too many producers offering good products in a market, and if it seems like there’s very little room for new entrants, it’s probably wise to avoid getting into that market. On the other hand, if there are unmet needs that you can supply, you may proceed with the business.
Who are your customers?
What demographic or psychographic groups will you be catering to? Millenials or baby boomers? Fashion conscious women? Nursing Mothers? Business executives? What geographic locations can concentrations of them be found? What online forums are they most frequently located? What sentiments motivate their decisions?
What are potential customers buying at the moment?
This leads you to their present preferences- the products that are likely occupying the place you want your own brand to take in their minds and experience.
Why do they buy what they’re buying right now?
The answer to this question, as revealed by the research, should help you build a product or service that meets customers’ needs, and has real potential to stay afloat.
What are competitors offering presently?
Research possible competitors to know which ones will be running you close or just rearing their heads over your horizon once in a while. Find out what they’re doing- the quality of the products they’re offering, their unique selling points, shortcomings, and the length of time they’ve been in business.
Are you offering what the market needs?
You may be convinced that people will want to buy your product when they’re actually not keen on the sort of thing you intend to sell. You can avoid the embarrassing (and catastrophic) consequence of such thinking by carrying out research that reveals what potential customers are actually thinking.
What is demand really like?
It’ll be terrible to discover that demand for your product is thin when you’ve already started up and incurred significant running costs (not to think of the shattered spirit that comes with closing the business down when it fails to break even after a long wait).
- Decide how the research will be done
Good market research is a tedious business if you’re going to do it on your own. It’s not easy to get people to answer questions about their purchasing habits; poring over industrial data isn’t sweet sauce either (except you’re a stat junkie).
You may consider enlisting the help of students at a university close to you who could do the research for a fee. They’ll see the questionnaires, data collation and maybe even interpretation and report writing if they’re schooled in that sort of thing. Alternatively, you could buy industry research reports from market research firms, or hire similar firms to get the job done specially for you. It all depends on how much money you are willing to spend. Access the cost-effectiveness of your options, and choose the one that proves the best balance of your ambitions and your budget.
- Conduct research
If you’re doing this alone, you’ll have to use multiple channels to get the most of the process. You can conduct online surveys on social media, or send links to the survey page via email to friends, colleagues and the wider public. You could also print and distribute questionnaires, and collate and interpret results from them. Information about the market you’re researching may be found on websites that provide trade and industrial data. If you’re investigating competitors, you can check their online pages to see what they’re about.
Of course, if you’re delegating research to other persons or firms, you might not have to do all of these.
- Analyze and interpret results
Results from research driven by the questions noted in step 2 can be evaluated and interpreted based on those same questions.
If you have trouble understanding what all the notes and ticked boxes you’ve gathered actually mean for your business idea, you may consult a marketing expert who knows how to feel figures. He or she could break the whole thing down for you.
Conclusion
It’s never a bad idea to know what you’re getting into before going into it. Better a tiresome research that turns a good business idea into a great one, than a great business idea sank by waves its creator never saw coming.
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This article was first published on 2nd December 2017
ikenna-nwachukwu
Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.
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