Market research aims to understand the reasons consumers will buy your product. It studies such things as consumer behaviour, including how cultural, societal and personal factors influence that behaviour.
Market research is further split into two varieties: Primary and secondary.
Primary research studies customers directly, whereas secondary research studies information that others have gathered about customers. Primary research might be telephone interviews or online polls with randomly selected members of the target group. You can also study your own sales records to gather primary research.
Secondary research might come from reports found on the websites of various other organisations or blogs written about the industry. For your plan, you can use either type of research or a combination of both.
Related: 9 Steps to a Working Business Plan
The basic questions you’ll try to answer with your market research include:
Who are your customers?
Describe them in terms of age, occupation, income, lifestyle, educational attainment, etc.
What do they buy now?
Describe their buying habits relating to your product or service, including how much they buy, their favoured suppliers, the most popular features and the predominant price points.
Why do they buy?
This is the tricky one, attempting as it does to delve into consumers’ heads. Answers will depend on the product and its uses. Cookware buyers may buy the products that offer the most effective nonstick surfaces, or those that give the most pans in a package for a given amount of money, or those that come in the most decorative colors.
What will make them buy from you?
Although some of these questions may seem difficult, you’d be surprised at the detailed information that’s available about markets, sales figures and consumer buying motivations.
Tapping information sources to provide the answers to as many questions as you can will make your plan more convincing and your odds of success higher. Also, the business plan software programs have detailed research included and online research available.
Utilise this functionality if you’re using such software, and add additional data you find elsewhere. The reason to add some of your own unique material is that everyone using the software program is tapping into the same database and you want your business plan to differ from that of the last entrepreneur in your field.
You can also find companies that will sell you everything from industry studies to credit reports on individual companies. Market research isn’t cheap. It requires significant amounts of expertise, manpower and technology to develop solid research. Large companies routinely spend tens of thousands of dollars researching things they ultimately decide they’re not interested in. Smaller firms can’t afford to do that too often.
For companies of all sizes, the best market research is the research you do on your own. In-house market research might take the form of original telephone interviews with consumers, customised crunching of numbers from published sources or perhaps competitive intelligence you’ve gathered on your rivals through the social media.
You can gather detailed research on customers, including their likes, dislikes and preferences, through Facebook, and use Google Analytics to sort out the numbers as they pertain to your web visitors.
People are researching and making their opinions felt through their actions on the web, so you can gain a lot of marketing insight by looking closely at what is going on electronically.
You’ll also want to do your due diligence within your industry. When looking at comparable businesses (and their data), find a close match. For comparative purposes, consider:
- Companies of relative size
- Companies serving the same geographic area, which could be global if you are planning to be a web-based business
- Companies with a similar ownership structure. If your business has two partners, look for businesses run by a couple of partners rather than an advisory board of 12.
- Companies that are relatively new. While you can learn from long-standing businesses, they may be successful today because of their 25-year business history and reputation.
You’ll want to use the data you’ve gathered not only to determine how much business you could possibly do but also to figure out how you’ll fit into and adapt to the marketplace.
Follow these steps to spending your market research dollars wisely:
- Determine what you need to know about your market. The more focused the research, the more valuable it will be.
- Prioritise the results of the first step. You can’t research everything, so concentrate on the information that will give you the best (or quickest) payback.
- Review less-expensive research alternatives. Small Business Development Centers and the Small Business Administration can help you develop customer surveys. Your trade association will have good secondary research. Be creative.
- Estimate the cost of performing the research yourself. Keep in mind that with the internet you should not have to spend a ton of money. If you’re considering hiring a consultant or a researcher, remember this is your dream, these are your goals, and this is your business. Don’t pay for what you don’t need.
Related: The 4 Types of Business Plans
This article was originally posted here on Entrepreneur.com.
Free SWOT Analysis Template
While all SWOT analysis templates comprise the same basic elements, ie Strengths, Weaknesses, Opportunities and Threats, the information you slot under each heading can make or break your planned product or solution launch.
Are you unsure of what to put into your SWOT analysis, or even what a SWOT analysis is? The following guide will assist you in setting up an ideal SWOT analysis and clear up any misconceptions:
21 Free Sample Business Plans
Writing a business plan can be a daunting process. Sample business plans can be very helpful in providing a format for you to build your business plan on.
Here you’ll find free sample business plans for every conceivable type of business.
Go through our collection of free sample business plans – we have one for almost every industry.
However, don’t just copy the sample business plan. The purpose of writing a business plan is to actually research and find out more about the business venture that you have in mind. It also allows you to stress test all of your business assumptions to ensure they hold up to real market conditions.
Business Plan Categories
Find 11 sample business plans here to launch your travel or transport business.
Educational Website Business Plan: Learn from education business, One Week At A Time’s business plan example, and create an educational website of your own.
Related: Business Plan Format Guide
Find 8 sample business plans here to help you launch your computers or internet business.
Find 4 sample business plans here to help you launch your construction or engineering business.
Find 13 sample business plans here to help you launch your consulting business.
16. Food and Farming
Find 7 sample business plans here to help you launch your food or farming business.
Find 4 sample business plans here to help you launch your health and beauty business.
Find 3 sample business plans here to help you launch your hospitality business.
Find 8 sample business plans here to help you launch your manufacturing business.
Find 2 sample business plans here to help you launch your medical or health care business.
Find 2 sample business plans here to help you launch your non-profit organisation.
10. Online Business
Find 2 sample business plans here to help you launch your online business.
Offering any dry cleaning home delivery service has to first start with a detailed business plan. Start your own business now with this sample business plan.
Find 5 sample business plans here to help you launch your services business.
Find 2 sample business plans here to help you launch your pets or animal services business.
Find 13 sample business plans here to help you launch your professional services business.
Are you looking to start your own magazine? Starting out as a magazine publisher will require a business plan similar to this one.
Would you prefer to start up your own newsletter? Use this sample business plan if you are starting up a business that offers newsletter publishing services.
4. Real Estate
Find 8 samples business plans here to help you launch your real estate business
Find 10 sample business plans here to help you launch your restaurant or bar business.
Find 3 sample business plans here to help you launch your retail business.
Find 10 sample business plans here to help you launch your sports and fitness business.
SWOT Analysis Examples
It’s not necessary to hire an expert to do a SWOT analysis for your business, you can quite easily do it yourself after checking out a few SWOT analysis examples online.
Seeing how a SWOT analysis can be implemented in a variety of ways is useful when you are busy with your business plan research and preparation; here are three SWOT analysis examples illustrating how this approach can be tailored to suit pretty much all areas of your business.
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