Today, there are over 71,100 startups in the US. This number may seem extremely high, but don’t let it fool you. The reality is, almost 90% of all startups fail, and 10% cease operations within the first year.
This might be enough to make you think twice about creating your own startup. However, doing some market research for small business purposes can already drastically improve your chances. So make sure you do your due diligence.
In this article, we’ll discuss how to do market research for a startup so your business has the best shot at success.
How to do Market Research for a Startup
Determine the Goal of Your Market Research
You can’t just dive into market research without determining what you want to learn from it first. Of course, you can generate lots of data, but it won’t be valuable if you don’t know how to make sense of it.
It can be helpful to form hypotheses. These are short questions you can answer through market research, and you can definitely have more than one.
However, it’s best if you select only a few so that your research doesn’t become scattered and incohesive. That way, whether you’ve already created your startup or need Business Anywhere to help with business registration, you’ve got a good sense of the direction to go in.
Establish Your Target Audience
While you’re determining the goal of your market research, you should also establish your target audience. After all, it’s difficult to do a market analysis if you aren’t sure who it’s for. Knowing who your target audience is will make it easier to do primary research too.
There are two main types of research: primary and secondary. Primary research is where you get data directly from your target audience, while secondary research is where you get data from existing research.
If you’re not sure who your target audience is, stop everything you’re doing, and don’t proceed until you do. You can conduct surveys, have focus groups, and conduct interviews to pinpoint specific demographics and details. In addition, you can get a better picture of their brand awareness, loyalty, and customer satisfaction.
See What Your Competition’s Doing
Your competition has years of experience over you, plus they’ve already established themselves in the market. Some might see these things as disadvantages, but you can use them to your benefit.
Everyone knows that overall, consumers are happy with what your competitors are doing. So carefully go over what their products are and how they’re priced. Also, see what marketing strategies they use and what types of customer service they provide.
Now look at your business strategy; does it look similar? If it varies drastically, then you should tweak it to fit your target audience better.
Go a step further and see what you can do to beat out your competition. For example, maybe you can price your products lower, or maybe you can provide more customer service channels, with more availability too.
By differentiating your products and services, not only can you can start out in the industry strong, but you can keep being a force to be reckoned with.
Do a SWOT Analysis
A SWOT analysis is the key to developing a business plan that’ll help your startup survive. “SWOT” stands for “strengths, weaknesses, opportunities, and threats,” and this framework will give you an overhead view of what to expect and how to handle potential issues.
Before starting a SWOT analysis, determine an objective first. For instance, you might want to find out if your startup should release a new product.
Then, assign the appropriate staff members to perform the competitive analysis. They’ll come up with questions to put under each quadrant. These should be separated into internal and external factors.
Next, narrow it down to a few ideas for each quadrant, so you can focus on the most important things, whether that’s breakthrough ideas or risks. From there, you can determine how to handle these things and when.
Proceed With Secondary Research
Now that you’ve narrowed down your strategies, it’s time for secondary research. You should find out what industry trends are, as well as the market size and growth potential.
The aim is to identify potential gaps and opportunities in the market. This is your chance to tweak your business strategy, slide into those gaps, and take the world by storm.
Sources you can use include industry reports, government data, online databases, competitor analyses, and online forums. Just make sure that they’re up-to-date and that you verify data with additional sources to ensure you’re getting accurate information.
If you aren’t in the local area, you can sign up for a virtual mailbox with Business Anywhere to receive information conveniently. That way, you can conduct research without interruption, no matter where you are.
Test Your Ideas
Before you make any finite decisions, you need to test your ideas first. Jump back to primary research; user interviews, focus groups, and surveys to see if consumers like your business ideas.
Whether they do or don’t, the important thing is to get their feedback. You can give them exactly what they want by refining your products or services based on their thoughts. And there’s nothing better than
When conducting this research, it’s best if you use a diverse range of people. This increases the chance of you receiving feedback you otherwise wouldn’t get from a homogenous group.
Testing isn’t a “one and done” deal either. To ensure you’re providing the best products and services possible to your target audience, it’s best if you keep revisiting your hypotheses, as well as create new ones throughout the years.
Know How to Do Market Research for a Startup Smartly
By knowing how to do market research for a startup, you can get into the minds of the people you wish to serve. It sounds like something simple all businesses should be doing, but you’d be surprised at just how many dive into things without doing key research.
Avoid making the same mistakes others have made and put in the effort and time to bring quality services and products to the market that are much needed. If do you so, you’ll avoid closure that numerous other startups have succumbed to.
Once you’ve done market research for starting a business, the next step is actually bringing your vision to life. Sign up with Business Anywhere to make this an easy and pain-free process. We can help you form an LLC or corporation, and more.