How to Start Doing a Market Research For Your Business

What information a market research should give you about your business and how to start.

Market research is a way of collecting information from the market that helps you to overcome and avoid any marketing problems in the future.

Market research tells you about the viability of the product and how it can expect to do when it’s launched in the future. It tells you about the potential of your business and how many customers are existing who are in need of your business product of service.

A market research helps to create an identity for your product and in this manner also helps to shape it better to face the competition. The market research can also help you choose the proper geographic location for your business where your potential customers are more highly saturated.

Before you begin your market research it is advisable to talk to a consultant, business or marketing professor at a local college or university or contact your local SBA district office. All these sources can point you in the right direction of how to go about doing a market research. They can tell you what kind of information you need for your particular business in order to make key and effective marketing strategies.

A market research should provide you with information in three critical areas of the business which is the industry, the consumer and the competition.

Industry information. A market-research should tell you about the trends that are in current flow in the marketplace. The market research should tell you about the current condition of your field of business such as whether it is a declining or increasing field of business. It should inform you about technological developments that are affecting the industry along with the government legislations and rules. A market research should give you the statistics and the growth potential for your business but comparing it to other existing businesses. You would ideally like to start a business in a thriving and stable industry rather than one which is on the client.

Consumer information. You can derive information about your potential customers and consumers by doing a market survey. A market survey can help you focus the number of sales and the amount of business that you can generate when you launch.

An in-depth look at your consumer will tell you several things about the consumer such as their spending characteristics, purchasing power, per capita income, unemployment rate and other demographic factors. Before you conduct a research on a consumer, you should consider whether your business is limited by any physical boundary or area in which it is going to function.

Looking at the consumer market research you would also be able to determine the current state of the current business that other businesses in your feed are already doing. In a nutshell, you should be able to reasonably estimate the amount of sales that you would be generating. It is very important to note here that starting a new business may simply redistribute the existing consumers rather than creating new ones. This means a lesser share in profit.

We again come back to what we were speaking about earlier about creating a niche.

Creating a niche is another way of generating new customers rather than tapping into the already existing ones. Specializing in a particular field often results in the generation of a completely new customer base. This is something that is good for the business and will be crucial to the success of your business.

Competition information. When you combine the information that you have received about the industry and consumers, you will be able to get a clearer picture about the competition present.

You should not only look at the current competition but also give due attention to potential future competition. When you study your competition you should study the strategies and operations.

Your analysis should give you a clear picture of potential threats from competition, opportunities and weaknesses and strengths of the competition facing a new business. You should get a clear picture of trends that have been established in the industry and where there is an opportunity for an advantage for your business. You can use several secondary research methods such as a library, the Internet as well as articles to learn about accomplishing. If you’re researching a publicly owned company you can contact them to obtain a copy of annual reports.

These reports will not only deliver about the financial state of the company but also what products or service it plans to emphasize in the future. One of the best websites for researching the competition is Hoovers online www.hoovers.com which for a fee provides in-depth profiles of more than 18,000 public and private companies. However there is a lot of free content available on the website as well.

Taking a Closer Look at the Competition when Doing a Business Market Research

Another thing that you should understand about the competition is that it is not always the obvious business week in review. For example, when you look at strategic groups that is competent as we use the same strategies and sell the same product or services you. These are obviously your competitors.

But, the second way to look at competition is to look at the businesses that are targeting the same consumer for that same extra spending dollar and the time. For example if you launch the clothing business, where you will sell latest designer apparel at affordable prices. Now you may feel that there is no other designer apparel store in your area so you do not have any competition. This is not necessarily true. Any other business such as the shoe store or even a beauty salon that invites the same customer to spend money on their appearance can be a competitor. Sometimes you need to go beyond the obvious definitions of competition and think of the box in order to avoid getting sideswiped by an unexpected competitor.

It is a fact that most of the entrepreneurs are clueless about what there competitors are up to. Make sure that you analyze competitor strategy and market position as a part of your market research.

Questions to Ask When Doing a Market Research

Market research is done with the purpose of finding out more about the prospects of your business idea succeeding when you launch it. So think of the uncertainties in your mind or even if you are absolutely sure that you product/ business will succeed when you start it, think of the things that could go wrong such as not finding enough customers, cost being too high etc.

Questions to ask when you’re doing market research.

Whether you hire a professional research firm or take on the duty yourself to do market research, your research should clearly answer the following questions.

The intent of the market research should be to discover as much as you can about the unknown factors controlling the success of your business. In this manner, a market research should typically provide you with the answers to the following questions.

  1. Who will buy the product – Most important aspect to think about. You have a great idea for a business. But is there anyone to buy your services or product? The demand of a business can depend on a lot of factors like income levels, demographics etc. So make sure you find out if the target customers are present where you want to start your business.
  2. Why will they buy it – Why will a person feel the need to buy a product? Does it cater to some requirement that is unmet by current business? Is it a product that is better than the competition? Are you creating a new need by your innovative product?
  3. Where will you sell it – Equably important. Not all kinds of consumers go to all locations. Where will your product or service me able to target your customers the best.
  4. How much will you price it – Pricing is important. Ask for too much and no one will be willing to pay for your business. Price it too less and you will not make as much as you could or would like to even though you have many customers.
  5. How much profit will you make – Deciding a profit margin depends on a lot of things like the demand and supply. If your business is sought after, it could be up to you to decide your profit margin. You could go with less profit with volume sales or high profit with selective sales.
  6. How much of a market can you expect to create – Are you going to create a new market and consumer need with your product?
  7. How much demand and redistribution – How much current market are you simply going to redistribute?
  8. How much competition do you face – How much competition do you face?
  9. Do you have an edge over the competition – How are you going to set yourself apart from the competition?
  10. Do you have a niche – Have you created a niche for your business that puts you in a specialized field?
  11. What are the laws and government regulations affecting your product and do any future changes in these policies affect the way you run your business?

Ineffective or lack of market research can be death for a business.

 

What is Market Research

Importance of collecting market research

It is surprising that while market research is such an important aspect of starting your own business, many entrepreneurs neglect to do it. Market research is something that should be done before you launch your business full-scale.

Market research tells you if your idea is sellable.

Many people who get a great idea for a business or at least they think they have an go full ahead with implementing it without doing adequate research. Just because you think you have a good idea does not think that it is necessary going to succeed. In order for any business to succeed, there has to be a market for it.

Market research tells you if someone will pay to buy from you.

This means that someone should be willing to pay to buy your product or service. Many people who start a business, especially a home-based business, start a business doing something that they had already been doing maybe in their previous job. These people have a fair idea of what the business entails. In which case they do not give give importance to market research.

Market research equally important when starting small

However, it can be a mistake even then. Starting your own business doing what you have been doing enough job can create a lot of differences. When you were working in a job, you did not have to be much attention to marketing, advertising and directly getting customers. A market research gives you a fair idea of the market condition and lays the groundwork for the marketing strategy that you need to apply in order to get potential clients. In other words, even if you start a business doing what you have done or sold in the past for somebody else, your business is going to require a certain point you.

Many entrepreneurs ignore market research for the fear of negative feedback or having to spend a lot of money.

There are other reasons why entrepreneurs ignore market research. Some are afraid of getting negative feedback whereas others fail if this going to be too expensive. Neither of these reasons is a good enough reason. For example, if you fear that you’re going to be negative feedback, then perhaps you should question and delve deeper into the business at the. As long as the negative feedback is coming from knowledgeable people who genuinely wish you to succeed, negative feedback might give you some great insight into the business idea and how you can further involved to make it more positive.

As for spending a lot of money. This again doesn’t have to be true.

Money and time spent today on market research can save you both in the future.

Market research will require additional expenses but it can be done on a scale that allows you to stay in budget. This is because there are several of ways of doing market research.. There are several free resources which can give you valuable information about your business and the potential market that you are going to be working in. Even if it does cost a few extra dollars to market research, consider it an investment in your future. Spending some money before she launched a business only to discover that there is not an adequate amount of back you cannot make it grow the way you thought you could, would only result in a bigger loss. Doing market research can save you money in the long run and help you create better chances of succeeding in business.

Summary

  • Importance of market research.
  • Great idea, but does it have enough demand.
  • Do not jump right in to the business start up.
  • Market research important step to determine practicality of starting a business.
  • Many businesses neglect this aspect.
  • Fear of being too expensive or hearing negative feedback.
  • Spending time and money today on market research today saves both in the future.

How to Write a Business Mission Statement

how to write a mission statement

Create an effective mission statement for your business by following these steps:

Remember, a mission statement can be just a few lines or it can be an entire page. These are some questions that you should ask in order to get a picture of your businesses goals and mission and put them down in words.

  1. Why are you in business?
  2. What are your reasons to start a business, what you want from it and what led you to start a business of your own.
  3. Who are your customers?
  4. Which people are trying to reach out to with your business or product and what are you doing for them through your business?
  5. What is the image of your business that you want to convey?
  6. What picture do you want your customers, employees and other people related to your business to see your business as?
  7. What kind of an image do you want to create for your business?
  8. What is the single most important thing that you want people to see about your business e.g. quality, guarantee, service etc.?
  9. What is the nature of your products and services?
  10. What factors determine the pricing and quality of your product?
  11. How does all this change over time?
  12. What is your role do you play in the business that helps to organize and lead your business?
  13. How does your business differ from competitors? You should never forget the impact of competitors on your business. If you ignore this aspect your business will suffer.
  14. How are you going to do things better, cheaper or faster than the competition?
  15. How do you use technology, capital, processes, products and services to reach your business goals?
  16. What is the underlying philosophy and values that guide your business?

Creating a business mission statement

Creating a mission statement for your business requires and should be given adequate time and thought. The first thing that you need to do is get a clear picture of every single facet of your business. This can be done by asking the questions that we have listed in the previous post.

Many entrepreneurs discover that making a business mission statement helps them get a clearer picture of the objectives and serves as a motivational tool in the future as well. Just the process of writing a mission statement helps them to discover and question certain facets of the business which otherwise could have been ignored. It helps clarify the reasons and motivations behind you starting your own business.

create a business mission statement

Easy Steps To Create A Business Mission Statement

Involve the people connected to your business.

it is usually a good idea to involve the other people in the mission statement because they might have a third-party perspective and enable you to see the strengths and weaknesses of your business better. they may be able to pinpoint certain aspects which you might have otherwise missed. if you do not have any partners or investors, you can take the opinion of knowledgeable family members and close friends. however, be sure to pick only positive supportive people who truly want you to succeed.

Set aside the time to write the business mission statement

mission statements can be short that encompass a few lines or an entire page. they are rarely longer than that. however, the thought process behind making a mission statement should be given due time and several hours and even a couple of days if required. when you think about your business several things might come to mind. it takes time to come up with the language necessary to describe the very heart and soul of the organization and something that serves as inspiration to everybody involved in the business.

Plan a date

if you need to involve other people in writing a mission statement for the business, set aside a date to do this. inform these people beforehand and write a list of topics to discuss with others.

find a quiet and comfortable place away from instructions and make sure that you cooked with refreshments and supplies such as adequate paper and pencils before you begin. not everyone might understand what a mission statement is all about so you might have to explain its meaning and purpose before you begin.

Brainstormw ideas

the brainstorming of a mission statement can be done by yourself or if you’re involving other people, by taking ideas from them. consider every aspect and i didn’t matter how silly it sounds at that point. if there are more people involved in making the mission statement, you can ask them to write a statement individually and you can later on, in these statements by taking the choicest bits of each one of them and fit them together.

Use positive and inspiring words

A mission statement does not have to be a formal business document. the language and the words that are used should signify the spirit behind the business. if you want to create a cheery mission statement, don’t hesitate to use unusual words even if they do not sound very formal.

Once your mission statement is ready, you can start spreading the word. If you have a website you can post it on that. you can send it out as a newsletter, you can even use it for a publicity release. You can put it up in your office where your employees and visitors can see it everyday. you can print it on company materials such as brochures and letterheads.

A mission statement which is always in sight will help you keep sight of your objectives. by keeping your mission statement you can stay close to the purpose, mission, goals and the spirit of your business. Many entrepreneurs review and read the mission statement from time to time because it helps them stay focused on the ideas and agendas and reminds them of the philosophy they first started the business out with.

How To Review Your Mission Statement Regularly

If things go according to plan, your business will grow and evolve with time. Where once you were looking at local sales, you could go national and even international. Where once you handled the business with a couple of employees, you could grow to a bigger office space with more than a dozen employees. Your product line could become bigger or you could diversify.

All this means that you mission statement might need a revamp. When businesses change, the mission statement needs to be updated as well. An outdated mission statement that no longer represents what the business is, is misleading and of no use to anyone. Worse, an inaccurate mission statement gives out the wrong image for your business, if you use it in public documents as well such as newsletter, letterheads etc.

It is not only the changes in the business that require for a mission statement to be updated. There can be changes in the economy, the market, your competitors etc. all of which have a direct impact on your business.

Review your business mission statement to make sure it accurately represents your current business strategy, placement, products, philosophy and goals.

A mission statement should remain concurrent with the growth of a business and effectively represent the position of your business in the current economic and social environment.

Summary:

  • Review mission statement to represent current business strategy and position.
  • Current goals represented in mission statement.
  • Updates with growing business and team.
  • Always says what your business represents in terms of current economic scenario and purpose.

What is a Business Mission Statement

what is a mission statement

Understanding Business Mission Statement, what it says about your business.

The next step after creating a niche is possibly creating a mission statement for the business.

A mission statement is able to list in a short and compact form the goals of your business. It gives a complete idea of the very essence of your business. It is an important tool which is as important as the business plan and marketing plan.

A mission statement can include anything that you feel is important about your business i.e. the way you want to conduct business, the goals you want to reach as well as the underlying philosophy of your business.

A mission statement can be a few lines or an entire page. It tells your customers, employees, suppliers and your sponsors what your business is all about.

A mission statement is not just for yourself and the business but also for the community at large.

The mission statement reflects every facet of your business, the range and nature of your products or services, pricing, quality, service, marketplace position, growth potential, use of technology and your relationship with your customers, employees, suppliers, competitors and the community at large.

A mission statement helps clarify what business you are in. A mission statement also reflects your business’s special niche.

Many entrepreneurs write a mission statement to not only clarify to themselves and to others what the business seeks to achieve but also to serve as an inspiration and motivation for everyone involved to continue to make the business work and grow towards that end goal of success and fulfilment.

define a mission statement

Summary:

  1. Important document, first part of business plan. 
  2. Tells of company philosophy, ideals and the mission of the business. 
  3. Defined relationship with customers, employees and community. Tells people involved like customers and suppliers what your business is about. 
  4. Speaks about your business. 
  5. Detail of the product and service, the price, quality, guarantee, service and your commitment to what you offer. 
  6. Clarify what business you are in. 
  7. Even list out potential growth plans.

 

7 Straight Steps In Defining A Niche For Your Business

Defining a business niche

Creating a niche is not some big mystery. Systematic and step by step approach can help you do this effectively. Meaning of creating a niche for your business is narrowing down your market to serve a more specific consumer need. This allow to you to target a specific category of consumer who is looking for what you are selling.

In today’s date when so much depends on effective marketing, being able to target a specific customer saves, money, time and is immensely more effective in converting customers in to sales. Without creating a niche a business can waste a lot of money and time and effort in reaching out to consumers who are not going to respond to the marketing efforts.

These are the steps to take in order to create a niche for your business.

Who do you wan to work with? Define who you want to work with.

What kind of customers do you want and even what other people you want to be dealing with in your business I.e. other principal parties. By knowing who you want to work with you can create a product that they want. Otherwise you will end up confusing the customers. Knowing who you wants to work with will allow you to make contact with your customers more easily.

The trend is towards smaller niches. Define the customer with as many specifics as you can. Just using age is not enough.

Use demographics, ethnicity, generational, gender, socioeconomic targeting in combination with each other. We will speak more about each of these targeting methods later on.

Use a focused approach. You cannot be everything to everybody. Be clear about what you want to sell. Your field of work is different from your niche. Your field of work could be apparel and garments. But your niche could be designed wear in ethnic embroidery and embellishments. In order to create a focus on on your product, do the following.

Make a list of your likes and dislikes. Make a list of your skills and experience. Describe your style and pattern for doing business. See if an idea emerges from a combination of your skills and experience. Sometimes a niche is a creation of something new and innovative from what you Have been doing so far.

Get customers perspective. Talk to potential and prospective customers. Get their feedback. See what they want. How do they respond to your product. Look at the product from the customer point of view and not just your own. Many people who start a business from some hobby or interest ignore this crucial aspect. They think just because they love what they do, so will others.

Evaluate your niche idea. By this time you probably have some sort of an idea emerging as to the kind of specialization you can bring to your business. Test the idea against the following rules: Does the niche allow you to have long term business goals and plans? Does the niche fulfil your long term business goals? Do the customers want what you are creating? Is it a one of kind thing that differentiates you from the competition? Does the niche allow itself to evolve in the future and adapt to changes in the market?

Testing the product. Before you launch full time, it’s a good idea to test your product. You can do this by giving out free samples, free newsletter, seminar and anything else that does not cost you a lot of money. If you are creating a new product. You can create a small sample of it and have a small sale in your home by distributing flyers in your neighborhood. You can experiment with the price as well and even let the customers decide how much they want to pay for it. This will give you a good idea of how much you can charge for the product safely.

Finally when it’s all done its time to put the niche in to the final implementation. If you have followed the steps for creating the niche, you put yourself in a better position for succeeding with finding targeted customers for your business.

Business niche

Summary:

  1. Make a Wish List – Who do you want to do business with. Cannot do business with everyone. Do not confuse your customers. Trend towards smaller niches.
  2. Focus – You cannot sell everything to everyone. Smaller is better. The field of your work different from your niche. Look at your experience, skills, lessons learn and style of working.
  3. Customer choices and perspective on the product. Speak to prospective customers.
  4. Giving shape to the niche – good niche has long term vision, caters to customer need, its planned, a ‘one of a kind’ or product with a difference, has the potential for expansion.
  5. Evaluate the niche against the above mentioned points.
  6. Test market the product. Do not spend a lot of money.
  7. Deploy the idea.

 

6 Effective Ways Of Choosing Target Market

how to choose a target market

What is customer targeting, importance of defining a market.

Gone are the days when thinking that you thought that creating a business product for 18-30 year olds was using a targeting approach. Today the market is mucus more specific. There are categorization based on ethnicity, demographics, community, childhood experience and none of them is removed from the other.

Do not fall in to the trap of trying to be something for every customer

All the factors are used in combination with the other to target the customer more closely. But why is targeting a particular market so important? Why can’t you just make something and have whoever is interested buy it? Or better still, why can’t you sell or have a service for everyone? The most brilliant minds in business today will tell you that it does not work like that. Smaller is bigger in business. If you try to please everyone, you end up pleasing no one. Even the biggest names like Walmart and Tiffany specialize in a niche. Walmart caters to more bargain minded consumers whereas Tiffany caters to high end jewelry and accessory customers. The very image of these two giants is about their niche. When you start a small business, you cannot afford to be all over the place. Its a waste of time and money. You will confuse your customers and yourself in the process.

You can market yourself more effectively when you specialize in a business

A customer should know exactly what you business is about. For example, having a craft store is great. But if you specialize in antique or traditional crafts then it narrows down your target customer and creates a niche for you. You can market yourself more effectively and your customers know exactly where to go when they want what you are looking for. Many entrepreneurs try to spread themselves too thinly thinking that the more wide their scope, the larger number of customers they can attract. These people have quickly discovered that it does not work like that. Only targeted approach to a business results in conversion to sales.

Specialized Business Convert more Sales

Having ten targeted customers that convert in to sales is better than having fifty where only 1% convert. And don’t worry about the market share. You are going to do a better job of tapping in to the existing market by creating a business niche for yourself and even succeed in creating a new need for your product. Be one in a million and not one of a million. Creating a niche is not some kind of a mystery process. It can be done with careful thought and planning. We will talk about how to go about creating a niche for your business in the later posts in this section. You will learn how to target your customer by narrowing down the consumer market that you need to tap into. Targeting a market had a lot to do with product development. In fact, that is where the niche is created. If you do not create a niche with your business product or service you cannot target the market effectively. Therefore, we are going to talk about both creating a niche and targeting a market.

Common Targeting Methods

Time for generalization of target market is over. Targeting with age and sex and demographics is too broad and not enough.

  1. Socioeconomic status – gender, region, lifestyle or technological sophistication.
  2. Age – age no longer means what it used to. There is a great difference in the way people of the same age might behave depending on other factors such as region, education, background, social status etc.
  3. Generational marketing – defining by social, economic, demographic and physiological factors.
  4. Cohort marketing – people who underwent the same experience when growing up.
  5. Life stages – what people are doing at a certain age in life such as traveling, retiring, having children, buying a home etc.
  6. Physiographic – conditions related to old age. Do not lump people with different preferences together. Make extra effort to segregate your niche as much as possible. The more narrowly defined, the more results you will see.

Summary:

  • Find out who or what your market is.
  • Try to make a niche.
  • Two basic markets: Consumer and B2B.
  • Creating a Niche : Narrowly defining your market for better results, focused approach and concentrated marketing efforts with the maximum responsive.
  • Niches need to be carefully crafted.