Calling all entrepreneurs and business owners: Did you know that only 60% of startups survive up to three years, while just roughly 35% make it to 10 years, according to a study by the US Bureau of Labor Statistics?
While there are many reasons why new businesses fail—for example, poor financial planning, weak value propositions, and bad timing—another reason could be a lack of sufficient market research. You wouldn’t buy a house without thoroughly researching the market, comparing prices, and evaluating other options, right? Well, the same goes for starting a business. Some people start a business because they have experience in a certain area, but there may not be a large demand for it. Or a franchise sounds like a golden opportunity, but the location for that sandwich or frozen yogurt shop needs to be chosen carefully.
Market research serves as the foundation of all business decisions, from product development to human resources. Below are just a few of the benefits market research affords startups:
1. It Future-Proofs Your Business
The commonly used business phrase—adapt or die—doesn’t just apply to well-established organizations, it also applies to startups. Keeping up with the trends within your industry ensures that you’re constantly evolving your brand and meeting the changing needs of your target audience.
2. It Inspires Confident Decision Making
Market research provides a wealth of insightful information about your market, audience, and competition. Armed with this information, you’re able to make better, more informed decisions about pricing, sales strategies, and marketing plans, as opposed to simply throwing various tactics at the wall and seeing what sticks.
3. It Boosts Competitiveness
Performing competitive market research can help to reveal key weaknesses in your competitors’ products, services, marketing strategies, sales strategies, and more. Armed with this data, you can then re-evaluate and readjust your strategies to stay ahead of the game.
Market research is an important aspect of launching a business. But if it’s so important, then why don’t more aspiring entrepreneurs make it more of a priority? Sometimes, people have their minds made up and driven business owners don’t want to cast doubt on their decisions. But most likely, it’s because market research can be time-consuming and expensive. After all, time is money—especially for new business owners who are just getting started.
To help make sure that you’re not wasting precious time and resources, and only performing market research that will help streamline your business strategy, consider the following:
Leave it to the Experts
Many entrepreneurs begin their search on Google and Bing to see where that leads them. But using search engines can lead you down a rabbit hole of misleading and outdated information. To ensure that you’re getting accurate data insight, use a third-party data provider, like Hoover’s, that offers detailed reports on consumer trends and competitors. For example, Hoover’s industry report on casual restaurants shows a 4% forecasted growth rate every year through 2019. And that healthy menu options and locally sourced food are more attractive in some larger markets that a lower price point.
Make it a Continual Event
Performing market research is not a one-time event. Industry, competitive, and consumer trends can change on a dime; therefore, it’s important that you make it an integral part of your overall business strategy. Each quarter, carve out some time to get up to speed on your industry’s trends and measure how your business stands up.
Use a Combination of Tactics
There are many different ways to conduct market research from primary to secondary research. Use a combination of tactics to get a full picture of what’s happening with your industry. Experiment with online surveys and polls, or try your hand at focus groups and keyword research. Once you’ve gotten a feel for all of the options out there, you can decide which tactics work best for your business and its budget.
Let’s face it, starting a business from the ground up is difficult—and, unfortunately, the odds are not in your favor as evidenced by the statistics. However, with the proper market research, you can create a solid business strategy and help increase your chances of success.
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