When starting your business, some of the most important data you can source is about your market. This includes not only your target client, but also your geographic location, industry outlook and recent business trends.
Finding this information can seem daunting, especially when a quick online search for market research brings up a smattering of expensive market research firms. It is possible, however, to conduct your own market research for a fairly reasonable price, and in some cases, for free. Below are five resources you can use to conduct market research with an overview of the information they provide.
- Population, including current numbers and recent trends
- Household information, including average number of people per household, income and type of dwelling
- Education, including the breakdown of the type of degrees awarded, school district information and costs
- Health, including information on insurance coverage
In addition to the general population report, the U.S. Census Bureau also conducts an economic survey every five years that specifically examines issues related to business and industry. This round up also covers economic indicators and many of the statistics are broken down by state and county. There is also a specific census of U.S. businesses.
When to use it: While the Census data is beneficial regardless of where you are in the entrepreneurial process, you might find it most helpful when you’re beginning your search.
What the data tells you: Census data is fact-based and does not include psychographic data, such as how buying decisions are made. Census data is demographic data.
What it’s best for: Understanding the area surrounding your business’ location, including income and poverty levels, population and economic indicators.
- Earnings data and labor statistics, including employment and unemployment by state
- Wages, including by area and occupation
- Regional information, including employment data by state and metro area
- Economic indicators by state
When to use it: This data is best analyzed at the beginning of your business planning process, especially before applying for loans or setting budgets. It’s important that your economic expectations are in line with what is happening in your area.
What the data tells you: Economic data by business and industry allows you to review trends and analyze indicators that speak to business success or failure.
3. Small Business Association (SBA.gov)
If you aren’t yet acquainted with the SBA’s website, it’s a great resource that you’ll find very useful. Everything you might need to know about starting your own business, including licensing information, details on loans and financing and tips for starting a business. It also includes links to a lot of resources that cover topics from general business to economic indicators to money and interest rates.
When to use it: The articles and information at SBA are written specifically for entrepreneurs and small business owners in mind. If using other sites to gather information seems daunting, you might want to use the SBA site as a guide for the information you need.
What the data tells you: As opposed to the Census Bureau and USA.gov, the SBA includes articles that use data from those sources, and applies them to specific industries and business scenarios.
What it’s best for: Reviewing information at SBA.gov will give you an idea of what data you’ll really need to move forward with your business plan. While the sources are mostly the same, the SBA distills the information into categories that are more applicable for small business owners.
A Quick Word About Government Websites
All of the data, for the most part, is sourced from the same data set. Much of the information you’ll find at USA.gov and SBA.gov originated at Census.gov. As such, it’s not necessary to use each of the websites to conduct your market research, but each site breaks down the information based on the target audience.
For example, the Census site targets the general population and researchers. USA.gov targets businesses, and SBA.gov targets entrepreneurs and small business owners.
Conducting Your Own Research
Many market research firms will stress the importance of conducting your own research or having a firm conduct it for you. The reasoning is that primary research is more valuable and targeted than secondary research conducted by others.
However, primary research can be expensive. Fortunately, there are now online sites that can enable you to conduct your own research to gather the data you need.
By offering participants a monetary incentive, FocusGroup.com can provide you with a pool of pre-screened consumers. They offer the option to conduct in-person focus groups, online surveys, one-on-one interviews and more.
When to use it: Data provided by the previous sites is fact-based, which doesn’t give you a lot of insight into how or why consumers make different decisions. A focus group gives you the chance to:
- Ask specific questions
- Propose scenarios
- Introduce products to a group of incentivized consumers
- Gather consumer opinions
What the data tells you: Qualitatively speaking, it can tell you whatever you want to know. You have control over the consumers that are asked to participate by choosing the age range, household income, gender and even occupation. Facilitators (those who lead focus groups) also work with you to develop questions that will give you the best chance to meet your goals.
What it’s best for:
- Introducing a brand new product or updating an existing product
- Working out bugs before introducing products to the market at large
- Evaluating new advertising or marketing campaigns
- Managing a crisis and analyzing the impact to the company’s reputation or brand
If you’re uncertain about partnering with a focus group firm, or find it cost-prohibitive, there are other options. One that is very easy to use for both facilitator and participant is SurveyMonkey.com. The site lets you set up your own survey. You can include true/false, multiple choice and essay questions, as well as ratings scales.
Responses are collected in a database and the information can be formatted in a variety of ways, including charts and graphs that will make it easier to understand. Survey Monkey also offers you the option to purchase a target audience if you don’t have your own email list.
When to use it: An online survey is really just a targeted focus group. You can use it to test products or opinions, proposed ad campaigns, new marketing options or even website design. It’s more cost-effective and quicker than an in-person focus group.
What the data tells you: Similar to in-person focus groups or interviews, it can tell you whatever you want.
What it’s best for: If you need a quick response or want to survey a large number of people, SurveyMonkey.com is a user-friendly and convenient option.
If you decide that primary research is best for you and your business and want to enlist the help of a firm, make sure to ask colleagues for recommendations. Also, meet with the firm first and make sure that you’re both clear on what your goals are and what type of information you’re seeking. This will help to ensure you’re spending your money wisely.
Market research is important to the start and continued success of your business. However, it’s important to know when enough is enough. You don’t want to spend so much time conducting research, primary or secondary, that you lose sight of your overall goal: starting your business.
As you’re conducting your own market research, it’s important to start thinking of how you will pay for your future marketing strategies. Once you’re ready to start crunching numbers, check out our article on how to create a marketing budget.