How to do market research for a small business

Do you want to do market research for a small business? Market research is a powerful activity that all businesses should undertake. However, as a small business, your resources (both financially and timewise) will mean that some market research options just aren’t realistic for you. Not to worry because even the smallest of businesses will have some options available. I’m fully aware of those limitations small business owners face, but also believe market research is vital so want to ensure every small business owner feels it is within their capabilities. Keep on reading to find out how to do market research for a small business.

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What is market research?

Before delving into the different ways that you can do market research for a small business it is important to define what market research is.

Market research is the process of gathering, recording and analysing data (qualitative and quantitative) with the specific aim of understanding your target market better and / or evaluating the feasibility of a new product or service.

Why is it important to do market research, even if you are a small business?

Some small business owners feel as if market research isn’t an important activity. Market research becomes another thing to do and just makes their to-do list longer. Whilst market research may require time, and money, in the long-term it is definitely worth conducting marketing research.

Firstly, market research can help you to make informed decisions before introducing a new product or service into the marketplace. Launching new products or services is often a lengthy process and there is nothing worse than going to all that effort of launching something new and then it not being well received by your target market (and worse not making any sales). Market research should help you to gauge how new products and services will be received and therefore make the right decisions about what products and services to launch and which ones to leave on the ideas pile.

Secondly, market research can help you to understand your target market better. The more you understand your target market the better you can design your products and services, and the better you can make your marketing. When you truly know your target market it becomes obvious what marketing channels to use and the messages you need to communicate.

The different types of market research: Primary vs secondary research

In the world of market research, there are two types of research: primary and secondary.

Primary research – This is research that the company actively conducts. You are gathering the data directly from your target market.
Secondary research – This is where the company uses research that already exists. You will gather research that was conducted by others and then analyse it.

Both types of research are useful and a small business it might be tempted to focus on secondary research since someone “has done the hard bit”. However, I would highly recommend that all businesses (solo, micro, small, medium and large) conduct some form of primary research.

3 ways to do primary market research for a small business

1. The Survey

The most popular method of conducting primary market research is the survey. It is easier than ever to create a survey online using services such as Typeform, SurveyMonkey or Google Forms. These providers will allow you to create an online survey that is easily accessible. All you have to do is share the link so that people can fill in the form.

The advantages of using a survey as a market research tool is that you are not limited in the number of responses you can gather (unless you are limited by the survey provider). This means even as a small business you have the opportunity to be able to gain a decent set of data, in order to do some proper analysis. Surveys also give you the opportunity to easily gain a mixture of qualitative and quantitative data.

The disadvantages of using a survey is that some people will respond differently to a survey to what they actually think. Also, with a survey the results you based on the questions you ask so writing a good survey is key.

2. Interviews

Another way of doing primary market research for a small business is by conducting interviews. Interviews are usually delivered one on one with a researcher and an interviewee. The researcher will have prepared a series of questions in advance.

Compared to a survey interviews require a bigger time commitment. However, don’t let that put you off. Interviews are a great way to gather market research and you can often gain insight that you wouldn’t from a survey. Whereas in a survey you’ll only get answers to the specific questions you ask in an interview you have the ability to ask further questions depending on what the interviewee says.

As a small business owner, it is unlikely you’ll have the time to conduct lots of interviews, but even running a few interviews in addition to a survey could be highly beneficial.

3. Observation

A third way to conduct market research is by observing. This is most applicable to businesses that have a product that someone can use, but it applies to online digital products as much as physical products. Observation is where you will watch someone use your product in real-time. For example, if you are an online course creator you could ask to be able to remotely see someone’s screen as they log into your course or membership area and then you observe how they use it. You can ask the individual to say out loud what is going through their head as they are navigating around your course or membership site. To make the observation even more powerful you could carry out an interview afterwards.

Using observation as a market research technique is a great way to gain in-depth insight because you can actually see how someone is using your product, rather than making assumptions. This can help you to see new opportunities to improve the product, as well as confirming whether the product is ready to launch.

Choosing the right market research method for your business

When it comes to choosing the right market research method for a small business you’ll need to consider your resources. How much time and money do you have available? This will usually inform your decisions. Also, think about the sample size. If you have a very niche product or service ,then interviews and observation which provide more in-depth information may be more valuable than if you have a product that is designed for the mass market and therefore getting information for a large number of people in important. In that scenario using a survey would make much more sense.

Compiling the data

The point of market research is to help you make informed decisions and that means you’ll need to turn gather all of the information from your different market research methods, analyse the data and create a findings report. The depth of your findings report will entirely depend on what you can manage in your business so don’t think it needs to be a 20-page document. It could just as easily be a one-page document that you actually refer back to. The point is to summarise what you’ve learnt from the market research process so that you can use those learnings in your business.

There you have it! You now know how to do market research for a small business.

Hopefully by now you have a better understanding of how to do market research for a small business and why it is important no matter what size a business is. Market research really should be a non-negotiable for every business, even if you only do a small amount from time to time.

In the comments, I would love to know what methods you’ll use to do market research going forwards.

WANT HELP WITH YOUR MARKETING YOUR BUSINESS?

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