Market research describes the process that businesses go through to better understand their product or target customer, or to identify a new market in an industry. It’s an invaluable tool for anyone starting a new business and has a range of purposes. It can help a business owner gather information about competitors, find a gap in the market or gauge how successful a new product might be. Effective market research can even help you to find a profitable niche that otherwise may have eluded you.

Read on to learn more about: 

  • What is market research?
  • Why market research is a good idea and when to do it
  • Market research methods
  • Where to begin
  • Data analysis

According to UK business magazine Business Matters, “Regardless of the differences that are unique to each business, one thing remains important – knowing what your customer base wants, and then work on fulfilling their needs in order to survive the competition”

Why market research is a good idea and when to do it

Market research methods are used by businesses at several stages of their growth. It could be that you have an idea for a new business venture, and you need to know if there’s an appetite for it. Or maybe you’re moving in a different direction and want to understand the client base better. It’s even a useful tool for businesses that have been running for some time – checking in to make sure you still understand your target customer is always a good idea.

And of course, it’s a useful tool to periodically look at competitors – what they’re up to might be what you need to do too. Or perhaps, there’s something they’ve missed an opportunity that you can identify and maximise. 

“As part of any market research, looking into what your competitors are doing is often a good place to start,” says The British Library. “By checking them out you can spot potential opportunities or gaps in your own service that you can fill.” 

If you’re thinking of starting a new business, having thorough market research at your disposal will also help you be more investable and also helps with any plans you might have for other financing. This will ultimately make financial partners more likely to invest. And with so much competition out there, a persuasive and well thought-through business plan is never a bad thing. 

Market research methods

There are two market research methods: primary and secondary, and they come in two forms: quantitative (numerical data) and qualitative (opinions, actions, wants and needs). Secondary research involves looking into published data from previous market research, carried out by other individuals or companies. Be aware when you begin researching, though, that not all sources are equally credible. So, if you’re looking online make sure you take your figures from sites with some authority, such as government data, trusted media sources and university research.

Where to begin

It might sound back-to-front, but when you’re starting your own business, secondary market research is the best place to begin. Once you’ve gathered some initial data, you can use this to tailor your own primary research. Primary research generally involves questionnaires or observational studies. Itcan be time consuming, though incredibly worthwhile. 

Online surveys are also a useful (and popular) way for small businesses to capture the views of existing and potential customers. And if you’re looking for more detailed and personal information about your customers’ thoughts and feelings, you can also conduct face-to-face research or focus groups.

Data analysis

Once you’re armed with all of this information, what happens next? Whether you go down the primary or secondary market research route, you’ll need to analyse the results in order to come to a conclusion about your chosen market and its trends. This will help you to understand the viability of starting your own business in this area, the likelihood your new product will be a success, or even just help you to understand how to target your market more effectively.

If this all sounds a little daunting, remember that you don’t have to do everything on your own. There are plenty of cost-effective tools out there to help you with online surveys, such as UK-based provider of digital survey solutions, Smart Survey. You’ll find various plans all geared towards helping you to create surveys and conduct market research to understand your customer better. They’ll provide you with easy-to-read data, presented in charts and graphs, and you’ll have support to help you make sense of your findings.

If you do use a service to aid your market research, remember to keep track of anything that you spend towards your business. It will all be taken into account when you submit your taxes at the end of the year. That’s why it’s also a great idea to open a business current account that keeps track of your spending. 

Countingup is the business current account and accounting software in one app. It’s ideal for small businesses who want to take the stress out of bookkeeping and financial admin. Find out more here.