{"id":18176,"date":"2018-12-09T23:09:24","date_gmt":"2018-12-10T04:09:24","guid":{"rendered":"https:\/\/www.hostgator.com\/blog\/?p=18176"},"modified":"2019-01-18T10:59:27","modified_gmt":"2019-01-18T15:59:27","slug":"market-research-guide-small-business","status":"publish","type":"post","link":"https:\/\/www.hostgator.com\/blog\/market-research-guide-small-business\/","title":{"rendered":"The Small Business Guide to Online Market Research"},"content":{"rendered":"

'Do your market research'\u009d is standard (and smart) advice when you’re thinking about starting a business. But what does market research tell you and how long does it take?<\/p>\n

The most important thing market research tells you is whether there are enough potential customers to support your business, locally and\/or online. The next key piece of information is who your direct competitors will be. With these two pieces of information, you can see whether your business idea could be profitable and how to make it competitive.<\/p>\n

As for how long it takes to do market research, experts in the field usually say to allow 6 weeks or more for a full-scale market research project, one that goes beyond answering those two basic questions to include multiple interviews and focus groups. That may seem like a long time, but it’s important to make sure your idea is on track before you go all in.<\/p>\n

In this post, we\u2019ll go over the basics of market research, helpful resources, and DIY tools to help you gather the business intel you need to vet your business idea and plan a successful launch.<\/p>\n

\"register<\/a>6 Questions Market Research Answers<\/h2>\n

Market research is the homework you do before you start your business to learn as much as you can about your prospective customers, the geographic market where you\u2019ll operate, your competitors, and trends in your industry. <\/span><\/p>\n

The great thing about market research is that, thanks to massive amounts of consumer data collected by government agencies and research firms, you can get as detailed a picture of your customers, market, and industry as your time and budget allow.<\/span><\/p>\n

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1. Are there enough potential customers near you to make your business work?<\/h3>\n

Let’s say you want to sell hand-tied flies to fly-fishing enthusiasts and you’d like to sell locally in addition to online. Are there enough fly fishers near you to make operating a storefront worthwhile? <\/span><\/p>\n

You can start quickly by Googling your business idea or product plus 'demographics'\u009d to find <\/span>trade association reports<\/span><\/a> and other marketing research that can show you a snapshot of your intended customer base. In this case, two trade groups put together a report that shows where the greatest number of fly fishers live. If you’re in the Carolinas or Florida, a brick-and-mortar shop might be worth having. If you’re in New England, the low level of participation means a storefront may not make sense.<\/span><\/p>\n

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2. Who will be your direct competitors?<\/h3>\n

Let’s say you want to sell your flies online and in a shop in Jackson County, North Carolina, a popular trout fishing destination. You’ll need to search online to find out who sells hand-tied flies online and who retails them in Jackson County. <\/span><\/p>\n

The <\/span>SizeUp<\/span><\/a> tool from the Small Business Administration is really useful for finding local competitors. In this case, it lists and maps all 36 fly fishing tour and equipment businesses in the Jackson County area so you can quickly size up the competition.<\/span><\/p>\n

\"sizeup<\/p>\n

Beyond those two big questions, there are more you’ll need to answer for better planning.<\/span><\/p>\n

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3. Who is the target market for your product?<\/h3>\n

It’s important to make sure your assumptions are on track and adjust if they’re not. For example, if your plan is to disrupt the hand-tied fly market to appeal to older teens and young adults, you might want to take a closer look at the market demographics for fly fishing: most fly fishers are 45 or older.<\/span><\/p>\n

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4. Do these consumers need and\/or want what you\u2019re planning to offer?<\/h3>\n

If you’re making fishing flies, the answer is a clear-cut yes. <\/span><\/p>\n

But if you’re planning another type of business, perhaps a birthday party planning service for kids, you’ll need to look more closely at your local market. Is it full of busy working parents who don’t have time to plan their kids’ events and have money to spend on help, or is your area full of stay-at-home parents who plan their own kids’ parties and have smaller household budgets? <\/span><\/p>\n

We’ll look below at a US Census tool that can help you find this sort of data.<\/span><\/p>\n

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5. Do they have money to spend with you?<\/h3>\n

Back to our hand-tied flies example. You can find this type of information by searching Google for your location, product or service, and 'economic impact'\u009d or 'consumer spending.'\u009d <\/span><\/p>\n

Searching for 'Jackson County fly fishing economic impact'\u009d returns a state-funded report showing that in 2008, more than 76,000 resident trout anglers spent more than $36 million on fly fishing equipment. The search also returned a 2016 press release showing that fly fishing contributed $174 million to the area’s economy.<\/span><\/p>\n

\"use<\/p>\n

This is general data but it shows that our local fly artisan may be on to something.<\/span><\/p>\n

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6. Is the market growing, shrinking, or holding steady?<\/h3>\n

Growing your business is easier if your customer base is growing, too. The report on fly fishing demographics shows that while the overall number of fly fishers is small, it’s trending upward. Find your data by searching for your product, business or niche plus 'participation trends'\u009d or 'growth.'\u009d<\/span><\/p>\n

To get more detailed answers to these questions, you’ll need to go beyond internet searches to conduct more specific primary and secondary market research. <\/span><\/p>\n