What types of market research is available to my business?

Published 10/05/2015 02:14 PM   |    Updated 10/05/2015 02:14 PM
What types of market research is available to my business?

Marketing research can help you learn valuable information about your business. One of the most important pieces is an idea of how many customers you potentially have, and how many of these potential customers are likely to become actual buyers.

The information you need to identify and count potential customers falls into four basic areas:

1. Information within your own files.

2. Information available to everyone (known as secondary sources).

3. Research you do yourself.

4. Research you pay to have done.

Click on the link below for a worksheet that can be completed in conjunction with this information on five key areas in marketing research:

Market Research Worksheet

1. Determining the number of your potential customers.
This step requires doing homework. If you are selling to the general public, you need to look at the US Census data for your market area. If you sell to other businesses, there are many potential sources of information; one of the best is a trade association.

Determine the number that will likely purchase from you.
This is a very tough question! You need to consider your competition, both in numbers and quality.

1. You also need to realize that some potential customers will not buy the product from either you or your competitors.

2. Determine your average customer sales per year.
This step requires more homework. Trade association or industry publications are good sources of information needed to answer these questions.

3. Determine your annual sales volume.
You now know the number of customers and average amount each customer will spend per year. Multiply these two numbers to calculate your expected annual sales volume.

4. Evaluate the annual sales volume figure.
Does the number you calculated in the previous step make sense? If not, go back to the first step and try again. What assumptions have you made about your customers? How accurate or risky are these assumptions? You want to substitute actual figures derived from some information source for your assumptions whenever possible.

Competitive Analysis
A key to the success of your business is establishing a unique market niche. In order to do so, you must take a close look at your competitors so that you can identify areas where you have a competitive advantage, as well as those areas that could use improvement. The worksheet below will help you think about your business and how it ranks against the competition.

Competitive Analysis Worksheet

For more information about market research for starting a business, visit here.
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