Small Business Growth Through Market Research

You need to know numbers. Small business owners are often very excited about their product and how they can help the market. But, does the market want or need your product? You need to know the numbers behind that question. Performing market research is a powerful driver for small business growth.

First of all, let me explain what market research is. This is the process of going to your target market and asking questions, interviewing, reading and researching to gain knowledge about what they want and what they are willing to pay for. This data should be in numeric form so that you can more effectively make decisions from it. 

Let me provide a simple scenario that supports the idea of collecting number centric information. Suppose that you are selling a revolutionary product that will change the way that people make french-fries all across the world. Your new french-fry-omatic allows people to specify the size and shape of their fries when they are ordering them. 

If you go into the marketplace and ask if people are interested in this, they might say that, yes, they are excited about this product and you might even find hundreds of potential customers at restaurant trade shows who want to buy these machines right now and put them in their restaurants. You could go to the bank and other business stakeholders and show them all of your survey forms where restaurant owners have shown how excited they were for this idea. 

However, this is not the information that you need. The banker will ask you what the machine costs to produce and how much you plan to sell it for. Suppose that it costs $500 to make and people will only buy it for $300. You will go bankrupt selling a product that everybody is ‘excited’ to buy. In this example the market research performed was inadequate. You never asked what people were willing to pay for this machine. Imagine if your survey forms indicated the restaurant owners would pay $1000 for this machine. The bank would feel very confident in giving you a loan to build your machines. Focus on the information that is most valuable to you and the successful growth of your business.

Conducting well-through-out and effective market research provides you a powerful tool to help you grow your small business. Performing focused market research is a great way to gain more clients, increase sales and grow your small business.