market research

Why All Budding Entrepreneurs Need to Embrace Market Research (and How to Do It)

Market research is one of the most powerful tools available to budding entrepreneurs. Effective market research can not only help you decide if your business idea is worth pursuing, but it can also help you discover a new direction for expanding your side hustle.

Many entrepreneurs avoid or neglect to do market research because they assume it is expensive or only effective for large-scale businesses, but neither of these ideas is correct. Whether you’re operating a side hustle, considering a business idea, or running a small startup, market research is imperative.

Here are four tips for conducting market research affordably and effectively on a smaller scale.

Keep it simple

Simplicity is key. Market research can be a highly complex, multi-faceted process, but it can also be as simple as a quick email with a couple of survey questions. Don’t get overwhelmed by the concept of a massive market research effort. Think of the market research process as learning and discovery—exploring new ways to make your business idea as air-tight as possible.

One example of just how simple market research can be is the use of surveys. You can gather invaluable data from a survey and it doesn’t need to be complicated or long to be effective. In fact, people are more likely to complete a survey that only requires one or two clicks. The catch with market research surveys is that you need a pool of people to complete the survey — i.e., a list of email subscribers or social media followers.

Related: Using Market Research to Create an Actionable Business Plan

Study the competition

Just as a solid sports team spends hours poring over footage of their next opponent, you need to spend time gathering data on companies that are doing what you want to do (or something similar).

Competitors in your niche offer up abundant data in their marketing campaigns. Find out how other companies are trying to reach similar customers who are interested in your product or service. Sign up for their newsletters. Read their blogs. Follow their social media accounts. This will give you fresh information about the audience and marketing methods that are effective for your industry.

Pay attention to how customers are engaging with them: which blog posts or social media accounts have the most comments and engagement? While you can’t see the open rate of their newsletter, you can get a great idea of engagement from their more public-facing channels. Use their efforts to your advantage—learn from their mistakes and their success.

Social media offers free market research data

Social media is one of the most cost-effective tools out there for completing market research. Searching terms and hashtags on outlets like Twitter and Facebook can give you an overview of who is talking about your niche and what they are saying. This kind of research can also lead you to discover exactly how people are talking about your product or service—maybe they are using words or terms that hadn’t occurred to you.

Social media also gives you the opportunity to conduct affordable interviews and surveys. Facebook groups within your niche or industry can provide a wealth of potential candidates for these studies. The process itself can be as simple as posting a few questions or sending a quick direct message.

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It’s never too early

I started gathering market research data about my company early in its existence, but I still missed out on some valuable information during the earliest stages of development. Your company is wholly unique, even if it falls into a clear niche. Therefore, clear and measurable data about your specific operations, services and products is the absolute best form of data you can get.

Early market research is important because it provides the greatest insight into what works, what doesn’t and how to improve, which is the key to a successful business. By learning who your customers are, what they want, what they don’t want, and how they will use your product or service, you can inform not only your initial business decisions, but later decisions, too.

Market research isn’t optional

There are cheap and even free ways to reap the benefits of market research. If you are bootstrapping or trying to reduce the costs of a new business, you don’t have to spend thousands or even hundreds on market research. By starting early, using social media and studying your competition, you can keep market research simple.

Market research shouldn’t be seen as optional—or unattainable—for new entrepreneurs. It is a core practice of good business, and the data you obtain from doing proper research will prove invaluable in every stage of business growth.

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