Utilizing Market Research to Find Customers
Market research blends consumer behavior and economic trends to confirm and improve your business idea. It’s crucial to understand your consumer base from the outset. Market research lets you reduce risks even while your business is still just a gleam in your eye.
Gather demographic information to better understand opportunities and limitations for gaining customers. This could include population data on age, wealth, family, interests or anything else that’s relevant for your business.
Then answer these questions to get a good sense of your market.
Demand
Is there a desire for your product or service?
Market size
How many people would be interested in your offering?
Economic indicators
What is the income range and employment rate?
Location
Where do your customers live and where can your business reach?
Market saturation
How many similar options are already available to consumers?
Pricing
What do potential customers pay for these alternatives?
You’ll also want to keep up with the latest small business trends. It’s important to gain a sense of the specific market share that will impact your profits.
Market Research
You can do market research using existing sources, or you can do the research yourself and go direct to consumers.
Existing Sources
Existing sources can save you a lot of time and energy, but the information might not be as specific to your audience as you’d like. Use it to answer questions that are both general and quantifiable, like industry trends, demographics and household incomes. Check online or start with our list of market research resources.
Direct Research
Asking consumers yourself can give you a nuanced understanding of your specific target audience. But direct research can be time consuming and expensive. Use it to answer questions about your specific business or customers, like reactions to your logo, improvements you could make to buying experience and where customers might go instead of your business.
Here are a few methods you can use to do direct research:
- Surveys
- Questionnaires
- Focus groups
- In-depth interviews
For guidance on deciding which methods are worthwhile for your small business, the Small Business Administration provides counseling services through our resource partner network.
Read more SBA blogs and learn more about starting and growing your business at sba.gov.
Small Business Administration
The Small Business Administration Iowa is responsible for the delivery of the SBA's many programs and services to the 99 counties in Iowa, consisting of 2.9 million Iowans and some 240,000 small businesses.