Most entrepreneurs are inexperienced and ignorant to the discourse of business when they first embark on the journey of managing a company. It’s not a bad thing, but it is a fact worth acknowledging. That being said, a vast majority of starting a business is education and in many instances, that education is informal and self taught. One of the greatest challenges of an independent business education is the experimental learning of trial and error. Some aspects of business will only make sense once you’ve tried it a few times and realize what is missing. Other aspects will come quickly and immediately and will pose no further threat to your business.
The pedagogical journey of entrepreneurship consists of a series of fundamental factors that should be considered and practiced for any serious contention for a successful business. One of these factors is market research; how well will your product or service perform in the market? Often overlooked due to costs, time, and significance, market research can make or break any business idea. We want your business venture to start off in a way that will encourage growth. As such, we’ve outlined our top three reasons why market research should be on your priority list.
Market research reaffirms your business idea
When you have a concept or idea and you wish to convert it into a product or service, market research helps you understand who your target audience is, whether there is indeed a demand or interest in your product, and ultimately your business’ success potential. For example, if you anticipate your target audience to be young adults between the ages of 18 and 27, but upon reviewing the data from your surveys and focus groups you notice that middle-aged persons express a greater benefit from the product, you may need to redesign your business model taking into account middle-aged individuals. On the other hand, you might also find that there is absolutely no interest whatsoever and your investment may not be worth it. Market research is simply a strong editing tool that can refine your business to properly meet the needs of your consumers.
Knowing your numbers
Numbers are vital to a business. How much will you pay? How much will your consumers pay? Are you competitive enough? Market research assists in money management. If you understand who your ideal consumer is, you can further assess how much they are willing to pay for your product. Additionally, it will gauge how much money you need to invest to obtain a beneficial return. Research will highlight the monetary relationship between the business and the consumer. If your intended audience is women, but they are from low-income brackets, you must consider the likelihood that they will impact your business financially, particularly in a way that will encourage steady growth.
Further, market research, in the form of business-to-business comparison, can help you determine whether your prices are too high or too low and how competitive you will be among your entrepreneurial peers. This research can often be obtained by simple web searches and do not require much time. It is an easy way to gain some perspective on your business.
Business and Market Predictability
Market research can reveal how your business will perform in its initial stages as well as the future. Granted, there are a myriad of factors that can cause predictions to deviate, it is still a reliable tool for estimates on what to expect. The research can guide contingency plans and business projections.
Whether you decide to limit your research to the web or other minimal resources or you choose to spend thousands of dollars in quantitative and qualitative data collection, market research will have a positive effective on your entrepreneurial pursuits.