You’ve come up with a brilliant idea, and now you’re eager to launch your business. Not so fast! You still have an essential step to take: do market research. This article explores six reasons to do market research before starting a new business.
Starting your own business is an exciting idea. You finally get the chance to be the boss and be more in control of your financial status. Yet, despite how dreamy it sounds on paper, owning a business also comes with a lot of challenges. And, these challenges start from day one as soon as you launch your business idea. You have to develop outstanding products/ services, attract customers, make sure you don’t fly under the radar, and ensure that you stand from the crowd of competitors.
This is where market research shines.
The truth is that there’s a new company idea popping up every second, and there are entrepreneurs everywhere you look. Even if you have a perfect product, there are still plenty of things you need to do better than any of your industry rivals to make it in the current business world truly. This makes it difficult for your new business to stand out. But, market research is that tool that can give your company the upper hand.
Here are six reasons to do market research and how it can help you build a sturdy foundation for your new business:
1. You test your business idea
You found that fantastic business idea you’ve always been searching for. Now, you’re almost certain that it will sell like hotcakes. Well, the truth is that “almost certain” isn’t good enough when it comes to investing plenty of resources like time and money in a business idea.
When thinking about transforming an idea into a lucrative business, it is always a good idea to ask for a second opinion that doesn’t come from your family and friends. And, who better to ask if your product is worth the money if not consumers?
Market research is a great tool to determine if your service or product idea is really worth your time and money. It connects you with the answers of actual consumers who can say if they would be interested in paying for a similar product/service or not.
Needless to say, a considerable number of “no” answers should be a relevant thing to consider whether or not to proceed with investing in an idea that consumers don’t seem interested in. In contrast, “yes” answers are an essential indicator that your business will genuinely sell like hotcakes.
2. You get a deeper understanding of how the market works
Once you know for sure that your business idea is worth investing in, you may think that you’re set for a successful launch. Unfortunately, that’s not always the case.
Often, the difference between a successful business launch and a failure stands in how much knowledge you gather about the market. Once again, market research can help with collecting all this information.
You can gather insights about consumer and market trends. For example, you can discover that certain moments of the year are more lucrative for your industry and launch your business during that period. Or, you may find that consumers tend to buy from certain companies with specific values, and you can adapt your brand’s image to that.
3. You learn about your target audience
You could have the most fantastic product out there and set up an excellent business, but if there’s no one to pay for your product/ service, it’s doubtful that your business will be successful. So, before you launch any product, you need to get a deep understanding of your target audience and how to attract buyers.
As the market research experts from Sapio Research explain, “Market research can help you identify a variety of insights about your target audience, including demographics, age, location, gender, income, buying patterns, and many others. Besides these data, market research also allows you to dig deeper into your audience’s pain points, needs, and wants.”
All this is essential in order to create products and promote them in a way that attracts customers and keeps them loyal.
4. You get familiar with your industry rivals
These days, the business area is very competitive among most industries. Starting a business nowadays is a lot easier than ever before, meaning that there’s plenty of competition in most industries. So, how do you make sure that your business doesn’t fly under the radar? You do market research.
Market research will help you identify your industry rivals and understand their strengths and weaknesses. You can learn from their successes and mistakes and use them to your advantage.
5. You identify problems before they happen
If there is anything wrong with your product/ service or business, you’d want to know about the problem and fix it before you launch it and make a big fuss about it.
The market research also allows you to anticipate potential challenges that may occur and affect your business, allowing you more time and resources to overcome the challenge easily and faster.
For example, using market research and understanding consumer buying patterns, you can make sure that you adapt your supply to cater to every consumer. Or, you may identify that a particular feature of your product isn’t what consumers want, you can change that before launching it, and everybody gets to notice and talk about it.
6. You identify new opportunities
Successful businesses always know what consumers want and what their pain points are. This leads to identifying new opportunities that you, or your competitors, may not have realized until now.
Market research can help you notice those new opportunities and give you insights on how to use them to your business’s advantage. You can be the first in your industry to discover particular problem consumers deal with and the first to provide a solution. This is a significant competitive advantage your business would get. Or, you may identify a consumer trend that is taking shape and be the first to adapt your business to it. This is another advantage that will help you stand out from the crowd.