Market research is arguably the most important step in the journey to starting a business. It enables you to understand your target market, competition, and overall industry landscape. Effective market research enables you to make informed business decisions, identify opportunities, and develop successful strategies.
A huge factor in the failure of many small businesses is a lack of market research. Business owners assume who their target customer is, what they want and what they’re willing to pay for it. You only have to get one of these assumptions wrong and the chances are your business will fail.
This guide will provide you with an outline step-by-step approach to conducting market research and recommends useful websites and templates to assist you in the process.
Even if you don’t complete every step, any market research is good market research.
Step 1: Define Your Objectives: Before diving into market research, it is essential to understand what you are trying to find out. You need to decide what specific information you are after and how it will support your business goals. For example, you might want to understand customer preferences, evaluate the demand for your product or service, assess your competitors’ strengths and weaknesses, or look at current market pricing.
Step 2: Identify Your Target Market: To conduct meaningful market research, you need to identify your target market. Clearly define your ideal customer by considering factors such as demographics (age, race, ethnicity, gender, marital status, income, education, and employment), psychographics (values, desires, goals, interests, and lifestyle choices), and their location. If you’re just starting a business, then step 4 can be a great place to start, for established businesses, ask your customers.
Tools like the Office for National Statistics (ONS) website provides valuable demographic data to help you understand your target audience.
Step 3: Analyse Competitors: Examining your competition is crucial to positioning your business effectively. Identify key competitors in your industry and assess their strengths, weaknesses, pricing, marketing, and customer feedback. Google is your friend here and websites like Companies House provide access to financial statements and key information on registered UK companies. Look at what they’re doing well and what opportunities there are for you to fill gaps in the market.
Step 4: Conduct Primary Research. Primary research is asking people in your target market what they think and want. There are several methods to consider:
Surveys and Questionnaires: Online survey platforms like SurveyMonkey allow you to create and distribute surveys to collect valuable insights directly from your target audience. Or use polls on social media platforms or even face-to-face.
Interviews: Conducting one-on-one interviews or focus groups with your target customers can provide in-depth qualitative data. Consider using tools like Zoom or Google Meet to conduct remote interviews.
Networking: Use groups like Your Business World to talk directly to a wide group of business owners in your target market.
Step 5: Analyse Secondary Research. Secondary research involves using existing data and information from credible sources. It provides insights into industry trends, market size, consumer behaviour, and more. Use the following resources for your secondary research:
UK Government Sources: Websites such as the UK Statistics Authority portal
uksa.statisticsauthority.gov.uk/
and the
Office for National Statistics offer a wealth of data on various topics.
Market Research Reports: Platforms like Statista and marketresearch.com provide comprehensive market research reports and industry analysis for a wide range of sectors.
Step 6: Analyse and Interpret Data Once you have gathered as much data as possible, analyse, and interpret it to get the answers you need. Identify who your customers are, what they want and what they’re willing to pay for it and let this inform your decision-making process. Tools like Microsoft Excel or Google Sheets can be invaluable for organising and analysing this data.
Step 7: Implement Findings into Strategy Use the information gained from your market research to inform your business plan. Identify areas for improvement, refine your target market, develop competitive advantages, and tailor your marketing messages. By aligning your product or service with the research findings, you can increase the likelihood of success dramatically.
Conclusion: Market research is a hugely important process for small business owners to make informed decisions and drive growth. We have only scratched the surface in this guide, but by following the steps outline, you can gather valuable insights about your target market, competitors, and industry. Remember to use online resources such as the ONS, Companies House, and market research platforms to support your research efforts.
Good luck with your market research endeavours and the future success of your business and if you need any help just contact us at Juggle!.
