If you have an idea for a new business, that is great news! There are millions of small companies out there that form the backbone of the American economy.
Before doing anything for your business, whether it's building staff, a business plan, or seeking small business lending, it’s important to realize there is some due diligence that comes with turning your idea into reality. This article will help you understand how to do market research that will help launch and sustain your small business.
Do This First, Before Seeking Small Business Lending
Market research defines a process of collecting data on your target customers to figure out if they will buy your product and what needs they have that your business will fulfill. Completing this research will help you understand where your customers are, who your competitors are, and what is influencing the buying process. Market research includes:
Where can you get this information? The Internet is a great tool, of course, which will lead you to the U.S. Census or Bureau of Labor Statistics data on specific business categories. Commercial sources where you pay for research can come from Pew, Forrester, or perhaps Gartner. However, you can also pay or conduct your own research into the customers you’re targeting.
The goal of all this research is to define your buyer persona. This should include an understanding of demographics like the age, gender, and location of your target buyer. What are the types of jobs they hold? Do they own their home and have a family? What challenges could drive them to purchase your product or service? You can research a lot of this online, but you can also conduct focus groups, which are simply a series of interviews with your target audience. Ultimately, you want to discover the wants or needs of this audience specific to why they would buy from you.
Once you know your audience, research your competitors. Most likely your target customer is already purchasing the product or service you’re selling from someone else. Who are they buying from now and why are they successful? Look at competitor websites and maybe even go visit their storefront if they have one. It’s a good idea to learn as much as you can from them—and then improve on what they’ve done to draw in more customers.
Finally, make sure you understand the market itself. Do you have a service or product that will sell if the economy is weak? Is your business a necessity or does it offer a luxury product? What will the overall economy do to your business if you launch it now? What does the future look like?
Once you’ve aligned and understood all of these issues, you’re ready to consider small business funding. Benetrends Financial can help you with 401(k) funding and small business lending to make your dream a reality. To get started, download our Innovative Funding Strategies For Entrepreneurs and schedule a consultation today.
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